Eli Lilly's Cork expansion set to continue despite firm's job cuts announcement
By Pádraig Hoare
A €200m expansion at Eli Lilly near Kinsale, Co Cork is not believed to be under threat despite the pharmaceutical company saying it is to cut 3,500 jobs worldwide as well as a number of its global facilities.
The company employs more than 1,000 people in Ireland in manufacturing and sales, including more than 500 in Kinsale.
However, it did not rule out job losses in Ireland.
Lilly announced it was to cut 8% of its workforce and close a number of sites in a bid to lower costs and invest in developing new medicines.
In May, it announced it was proceeding with a €200m expansion at its Kinsale site after putting the decision on hold in the wake of Donald Trump’s election as US president. A spokesman for Lilly said: “We do not expect the news to impact the recently commenced investment at the Lilly biopharma manufacturing campus in Dunderrow, Kinsale.”
Lilly, which has had setbacks over the past year in the development of two potential blockbuster drugs, will cut about 3,500 positions around the world, resulting in yearly savings of about $500m (€416m), beginning in 2018. Shares rose almost 2% after the announcement.
The company expects most of the cuts to come from a voluntary early-retirement programme it is offering in the US. It is also closing a plant in Iowa and research and development offices in New Jersey and China.
The spokesman added: “This work will free up resources to invest in our most promising medicines — both new products, new indications and line extension — to benefit millions more patients around the world.”
Lilly outlined in July a likely multi-year delay for its experimental rheumatoid arthritis drug baricitinib, after the US Food and Drug Administration (FDA) declined to approve the drug, calling for an additional clinical study.
That delay followed the failure of a trial in November of Lilly’s experimental Alzheimer’s treatment solanezumab, which the company had hoped would be the first medicine approved to slow progression of the disease.
The company said it has the potential to launch two new medicines by the end of 2018 — a breast cancer drug and a treatment for migraines. The FDA is currently reviewing abemaciclib to treat advanced breast cancer.
Lilly’s chairman and chief executive David A Ricks said: “We have an abundance of opportunities — eight medicines launched in the past four years and the potential for two more by the end of next year.
“To fully realise these opportunities and invest in the next generation of new medicines, we are taking action to streamline our organisation and reduce our fixed costs around the world.”
Additional reporting Reuters
