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Eli Lilly to sell Indiana plant to Evonik

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Drugmaker Eli Lilly & Co. said Wednesday it will sell an Indiana manufacturing plant to chemicals maker Evonik Industries AG for an undisclosed amount.

The sale is the latest in a series of cost-cutting moves for the Indianapolis drugmaker, which said last month it would eliminate 5,500 jobs by the end of 2011. The 700 people who worked at Tippecanoe Laboratories will all be offered jobs with Evonik, Lilly said.

Lilly said it will take a one-time charge of 23 cents per share in the third quarter. Analysts expect Lilly to report a profit of $1.01 per share in the September quarter, according to Thomson Reuters. Wall Street estimates usually leave out one-time items.

Use of the Lafayette, Ind., facility is seen slowing in the future because patents on some drugs made there will expire soon, the company said. Lilly also cited its shift toward developing more biotech drugs, and its decision to buy more of the chemicals used in drug manufacturing rather than making the chemicals.

Evonik will also make ingredients for some Lilly drugs over the next nine years.

Lilly shares rose 52 cents to $33.88 in trading Wednesday.

Copyright 2009 Associated Press. All rights reserved.

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