Eli Lilly will build a $4.5 billion research and manufacturing facility to fuel the drug pipeline

Eli Lilly It will spend $4.5 billion to build a center aimed at finding better ways to make its drugs.

The facility, called Lilly Medicine Foundry, will develop new manufacturing methods with an eye on efficiency. It's a strategy that's already paying off with Lilly's obesity and weight-loss drugs Mounjaro and Zepbound, and Lilly wants it to drive the rest of its pipeline.

The foundry serves a dual purpose: researching new manufacturing methods, then practicing them with producing drugs for clinical trials. Lilly said the facility would be the first of its kind to combine research and manufacturing in a single location.

“It takes molecules from a lab bench to scale up for a drug in a pharmacy, and this R&D site will do that,” Eli Lilly Chief Executive Officer David Ricks said in an interview from the company's headquarters in Indianapolis. .

The center, which will open in late 2027, will be equipped to develop small molecules, biologics and genetic medicines. It is also building a $9 billion manufacturing complex in Lilly Lebanon, Indiana, to make pharmaceutical ingredients such as tirzepetide, the active ingredient in Mounjaro and Zepbound.

About 40 minutes from Lilly's Indianapolis headquarters, the cranes and steel frames of the active construction site are tucked away in flat farmland.

The investments are part of Lilly's plan to build on its success with Mounjaro and Zepbound, which is riding a wave of popularity in so-called GLP-1 drugs with Novo Nordisk's Ozempic and Wegovi.

Mounjaro and Zepbound alone are expected to bring in $50 billion by 2028 — nearly double the company's full-year revenue in 2022. This gives Lilly more freedom to invest, but it puts pressure on the company to find and develop more new drugs. Keep growing in the coming years.

Lilly is already determining its future outside of tirzepatide. The company also wants to develop more drugs for Alzheimer's disease and other neurodegenerative conditions such as amyotrophic lateral sclerosis, or ALS.

“There are these huge opportunities to improve human health that are hidden in plain sight,” said Dr. Dan Skowronski, Lilly's chief scientific officer. “In our industry, people generally like to see what's popular and then follow the leader. So many other companies are now putting off their various research projects to try to understand how obesity and Alzheimer's disease catch up to us. Well, We are working on the next one.”

Skowronski said Lilly wants to look for “advanced ideas” in areas where the company already has a foothold, such as oncology and immunology, as well as new areas such as cardiovascular disease, chronic pain and hearing loss.

Neuroscience is an area he and Ricks want to focus on. Lilly's antidepressant Prozac and its newly approved Alzheimer's drug Kisunla have a long history, but they look to work more.

“There is a huge unmet need in neuropsych,” Ricks said. “Addiction and mental health, but also neurodegenerative conditions, so we're investing a lot there. And maybe the gains we make in obesity can help fund research in new areas.”

It goes without saying that Lily is done with obesity.

Rix recognizes that one drug will not meet all needs and that Lily needs to push the science forward. The company has 11 obesity drugs in its pipeline with different formulations and delivery methods, he said. It includes two closely watched drugs in phase 3 trials: an experimental pill called orforglipron and an injectable drug called retatrutide.

Lilly is investing wherever it thinks it makes sense in obesity, Ricks said, but he acknowledged that other companies may be exploring new processes that Lilly can't. He wants to see more pills, especially ones that can go after multiple targets. He is also interested in technologies that mean less frequent injections, such as small interfering RNA.

Any new breakthrough could help Lilly become the first trillion-dollar health-care company. The company's stock has risen nearly 65% ​​over the past year, giving Lilly a market capitalization of nearly $840 billion.

Ricks downplayed the importance of hitting the trillion-dollar mark, saying it's an outcome for Lilly, not a goal.

“We want to do things of value, and if we succeed, we create value,” Ricks said. “That way we can get a bigger number.”