Eli Lilly sells operations to Convance

Eli Lilly has announced the sale of its operations in Greenfield, Indiana, to drug development services company Convance.

The company will sell the site and transfer its operations for an up-front sum of $50 million (25.7 million pounds).

Both companies will also sign a ten-year service agreement, under which they will widen their existing strategic collaboration, with Convance taking on responsibility for toxicology testing and other research and development support activities at the site.

Eli Lilly said these moves are part of a wider series of actions to restructure its research and development organisation to enhance its ability to compete in the changing market.

It said this restructuring has the goal of reducing drug development costs while increasing productivity.

John Lechleiter, president and chief executive officer of Eli Lilly, said: “These actions reflect Lilly’s determination to take the necessary steps to compete in a very challenging marketplace, in which our customers are demanding innovative, high-quality, affordable medicines.”

He added these are difficult but necessary decisions that must be taken in order for the company to compete successfully as an independent company based in Indiana.

Earlier this month, Eli Lilly reaffirmed its offer to purchase SGX Pharmaceuticals for a total price of $64 million.