Lilly expands trial supply deal with Thermo

Eli Lilly has expanded a clinical trial materials supply agreement with Thermo Fisher Scientific in yet another deal that sees the drugmaker hand over assets as part of a long-term outsourcing contract.

Under the terms of the latest agreement, Thermo Fisher will take over Lilly's operation in Indianapolis, USA, for clinical trial materials manufacturing, packaging and labelling.

The deal includes the purchase of manufacturing and packaging equipment at Lilly Technology Centre-North, while Thermo Fisher subsidiary Fisher Clinical Services will move into the site but not purchase it, according to a Lilly news release.

Lilly's CTM centre employs 115 people, 80 of whom are full-time workers, and all will have to apply for positions with Fisher Clinical. The transition period is expected to end sometime in the summer and Fisher Clinical has said it will give an update on hiring of Lilly employees in a few weeks.

Fisher Clinical will handle the distribution of all of Lilly's CTM requirements in North America by the end of 2010 for an initial contract period of five years, said the firms. The value of the contract has not been disclosed.

Lilly has been aggressively pursuing this sort of outsourcing arrangement in order to reduce its fixed costs, enhance profitability and speed the development of new drugs.

The drugmaker started down the path when it sold off its Greenfield Laboratories campus to Covance in 2008 for $50 million. At a stroke, it reduced the costs of operating the site, which focused on preclinical toxicology and discovery science, and ensured continuity of supply via a 10-year deal with Covance valued at $1.6 billion.

Meanwhile, Lilly followed that pioneering agreement up with strategic level deals with a series of outsourcing partners including Quintiles, i3, ICON plc and Jubilant Organosys. The Covance collaboration was also expanded earlier this month to include analytical testing services for all of Lilly's developmental biologic drugs at the Greenfield site.