Inside the Lilly deal: A detailed look at Lilly’s decision to invest $1B in Concord

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CONCORD – Global pharmaceutical giant Eli Lilly and Company announced plans today to build its second North Carolina manufacturing facility in as many years, this time in the Charlotte suburb of Concord, where it plans to invest more than $1 billion in a new factory and create nearly 600 new jobs.

The 145-year-old Indianapolis-based company is just completing a $470 million pharmaceutical factory 125 miles to the east, in North Carolina’s iconic Research Triangle Park.  That’s where it announced a 462-job commitment in January 2020.

RTP is the world’s original research park and has served as a major life sciences and tech magnet for more than half a century. Today’s Lilly announcement signals a growing recognition that the entire state of North Carolina is fair game for global life sciences investment.

Drug giant Eli Lilly to build new $1B plant in Concord, will create nearly 600 jobs

Labor force, relationships key factors

Lilly said the new Cabarrus County facility will manufacture parenteral (injectable) products and devices and increase the company’s manufacturing capacity, paying an average wage of $70,555 — more than 60% higher than the countywide average of $43,472. The company estimated 500 additional workers will also be involved in the facility’s construction on its 400-acre site, which will also have room for future expansion.

“Lilly is entering an exciting period of growth and we are committed to delivering innovative medicines to patients around the world,” said Edgardo Hernandez, senior vice president and president, Lilly Manufacturing Operations, in a statement. “Expanding our manufacturing footprint in North Carolina enables us to continue to produce today’s medicines while providing additional capacity to manufacture the medicines of tomorrow. We are pleased to again partner with North Carolina to bring jobs to American workers and provide more medicines that patients need to address health challenges.”

Lilly says it selected Concord because of the manufacturing technology experience of the local labor force; its proximity to universities with strong science, technology, engineering, and math (STEM) programs; and its access to major transportation infrastructure. In conjunction with Lilly’s RTP site, the company said this new facility in Concord will allow it to strengthen relationships with local governments and universities and diversify its growing presence in the state.

“Lilly’s choice brings more good jobs to North Carolina from one of our most important industries,” said North Carolina Governor Roy Cooper. “North Carolina has become one the premier hubs for biotechnology in the world, thanks to our exceptional workforce and commitment to education.”

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Project shows the promise of federal Build Back Better grant

Talent is a key factor in companies selecting North Carolina for their biopharma manufacturing operations. NCBiotech and a statewide coalition of public and private partner organizations and institutions received a $500,000 federal Build Back Better Regional Challenge award in December for a proposal entitled “Accelerating Life Science Manufacturing to Create Economic Resilience and Promote Equity in Distressed North Carolina Communities.”

The phase 1 award is helping academia, industry, state and local government, and other partners to work together to develop strategies to connect, scale, and promote the state’s life sciences manufacturing cluster, to bolster and diversify statewide talent. Lilly is an example of the expanding biopharma manufacturing sector’s potential to transform communities in and around Cabarrus County, and across the state.

Confronting the growing need for life sciences workers and COVID-related workforce changes, more than a year ago NCBiotech launched a statewide campaign, Bio Jobs Hub, to raise awareness of the life-changing opportunities in the life sciences that too many people hadn’t seriously considered. The project, developed in partnership with WRAL Digital and WRAL TechWire, continues to spotlight people who are successfully transitioning from other fields to pharmaceutical manufacturing and other life sciences opportunities.

“Lilly is a global leader in the pharmaceutical industry and its selection of Concord for its second site in North Carolina is a significant affirmation of the strength of our state’s life sciences ecosystem,” said Laura Rowley, Ph.D., vice president of life science economic development with the North Carolina Biotechnology Center. Rowley is a scientist in a rare specialty offered by NCBiotech, providing technical guidance and “talking the language” whenever life sciences companies are considering expansion or relocation in North Carolina.

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Strong statewide life sciences support

“While most of the state’s biopharma manufacturers are clustered in the Research Triangle region, more companies are recognizing that North Carolina’s unique network of life sciences infrastructure enables them to consider locations statewide,” she added. “Lilly’s commitment to community engagement combined well with North Carolina’s continuum of resources at the local and state level. We are able to offer Lilly programming from Rowan-Cabarrus Community College, the NC BioNetwork system, the incredible NCBioImpact workforce training collaborative, and the support of NCBiotech. It’s this strong framework that makes me confident that Lilly will find success not only in RTP, but also in the Charlotte region.”

Corie Curtis, executive director of NCBiotech’s Greater Charlotte Office, also expressed great support for the Lilly decision to locate in her region. “Lilly’s commitment to expand its North Carolina footprint to Cabarrus County is a transformational opportunity for the Charlotte Region’s life sciences community,” she said. “We, along with our ecosystem partners, welcome Lilly to the Greater Charlotte Region and anticipate myriad of opportunities for collaboration. It’s a privilege for the Biotech Center’s statewide team to extend our reach and impact across the state in service to all North Carolinians. Lilly’s announcement is indicative of the region’s robust resources and growing life sciences sector.”

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Therapies target diabetes, Alzheimer’s, cancer, autoimmune conditions

Over the last five years, Lilly has invested more than $4 billion in global manufacturing, including more than $2 billion in the U.S. The company also announced plans today to invest $500 million in a new biopharmaceutical manufacturing facility in Limerick, Ireland. Lilly anticipates additional future investments in manufacturing to address growth expected from potential new medicines to treat diabetes, Alzheimer’s disease, cancer, and autoimmune conditions.

The investment in Concord is contingent upon completion of county and municipal government permitting and related approvals. Lilly and NCBiotech partnered with several organizations throughout the company’s site explorations, including the Office of the Governor, the Department of Commerce, Cabarrus Economic Development Corporation, the City of Concord, Cabarrus County, the Economic Development Partnership of North Carolina, Rowan Cabarrus Community College, and the North Carolina Community College System.

“North Carolina’s workforce continues to deliver a competitive edge to companies like Lilly, and we aim to keep it that way,” said North Carolina Commerce Secretary Machelle Baker Sanders. “The state’s strategic economic development plan is called the First in Talent plan for a reason, and that’s because North Carolina understands the importance of investing in our people and the educational systems that create opportunities for everyone.”

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Facilitated by incentives package

Lilly’s project in North Carolina will be facilitated, in part, by a Job Development Investment Grant (JDIG) approved by the state’s Economic Investment Committee earlier today.

Over the course of the 12-year term of this grant, the project is estimated to grow the state’s economy by $5.7 billion. Using a formula that takes into account the new tax revenues generated by the 589 new jobs, the JDIG agreement authorizes the potential reimbursement to the company of up to $12,126,750, spread over 12 years.

The company’s JDIG agreement lists its investment target as $939 million. State payments only occur following performance verification by the departments of Commerce and Revenue that the company has met its incremental job creation and investment targets. JDIG projects result in positive net tax revenue to the state treasury, even after taking into consideration the grant’s reimbursement payments to a given company.

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A Tier 3 county

Because Lilly chose a site in Cabarrus County, classified by the state’s economic tier system as Tier 3, the company’s JDIG agreement also calls for moving more than $4 million into the state’s Industrial Development Fund – Utility Account.

The Utility Account helps rural communities finance necessary infrastructure upgrades to attract future business. Even when new jobs are created in a Tier 3 county such as Cabarrus, the new tax revenue generated through JDIG grants helps more economically challenged communities elsewhere in the state. More information on the state’s economic tier designations is available here.

Lilly has nearly 35,000 employees worldwide, more than 15,000 in the United States. It has manufacturing plants in seven countries, and it sells its products in 120 countries. It reported net sales in 2020 of $24.54 billion, reporting net income of nearly $6.2 billion. The company is known for its commitment to “giving back” to the communities in which it resides, through philanthropy and volunteerism.

© North Carolina Biotechnology Center





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Kassie Hoffman
Kassie pens down all the news from the world of politics on ANH.