Evonik Will Acquire Lilly API Facility

Evonik Industries has agreed to acquire Eli Lilly & Co.'s Tippecanoe Laboratories facility in Lafayette, Ind., a manufacturer of active pharmaceutical ingredients (APIs) and precursors that employs about 700 people. In addition, Evonik and Lilly will enter a nine-year agreement under which Evonik will make APIs and intermediates for certain Lilly products. Lilly says it is selling the site because of upcoming patent expirations; a decision to purchase, rather than make, many late-stage chemical intermediates; and the evolution of its pipeline toward biotechnology medicines. It will take a 23-cent-per-share charge in the third quarter to account for the sale. Evonik CEO Klaus Engel says the purchase "substantially boosts" his firm's exclusive synthesis business. The firm already has pharmaceutical ingredient plants in Europe and Asia.