Lilly to build $6.5 billion manufacturing facility in Houston

HOUSTON - Eli Lilly and Company (NYSE:LLY), a pharmaceutical giant with a market capitalization of $668 billion and impressive revenue growth of 37% over the last twelve months, announced plans to build a $6.5 billion manufacturing facility at Generation Park in Houston, Texas, focusing on the production of small molecule synthetic medicines. According to InvestingPro analysis, the company is currently trading near its Fair Value, demonstrating strong financial health with an exceptional gross profit margin of 83%.

The planned facility will be Lilly’s eighth U.S. manufacturing site announced since 2020 and is expected to create 615 permanent jobs and approximately 4,000 construction positions. The site is projected to be operational within five years, according to a company press release. This expansion aligns with the company’s strong financial position, as InvestingPro data shows Lilly maintains a moderate debt level and sufficient cash flows to cover interest payments, supporting its aggressive growth strategy.

The Houston facility will manufacture active pharmaceutical ingredients for medicines across therapeutic areas including cardiometabolic health, oncology, immunology, and neuroscience. It will be among the sites producing orforglipron, Lilly’s oral GLP-1 receptor agonist, which the company plans to submit to regulatory agencies for obesity treatment by the end of 2025.

"This significant U.S. investment and onshoring of our API production capabilities will ensure faster, more secure access to orforglipron and to other life-changing medicines of the future," said David A. Ricks, Lilly chair and CEO.

The Houston site represents the second of four new U.S. pharmaceutical manufacturing facilities Lilly plans to announce this year, following a recently announced location in Virginia.

Lilly selected Generation Park, a commercial development northeast of Houston, from more than 300 applications based on criteria including workforce potential, local incentives, and transportation access.

Texas Governor Greg Abbott noted the economic impact of the investment, stating that the facility "will not only bolster Houston’s economy, it will boost our life sciences sector."

The company plans to implement advanced technologies including machine learning, AI, and digital automation throughout the site to streamline operations and ensure medicine quality and supply reliability. With a robust return on invested capital of 39% and maintaining dividend payments for 55 consecutive years, Lilly demonstrates strong operational efficiency and shareholder commitment. For deeper insights into Lilly’s financial health and growth prospects, investors can access comprehensive analysis through InvestingPro’s detailed research reports, which cover over 1,400 top US stocks.

In other recent news, Eli Lilly and Company has reported significant developments in its diabetes treatment portfolio. The company’s diabetes medication, Mounjaro, showed strong results in a Phase 3 trial involving children and adolescents with type 2 diabetes, demonstrating significant improvements in blood sugar control and BMI reduction. Additionally, Eli Lilly’s experimental oral GLP-1 drug, orforglipron, outperformed Novo Nordisk’s oral semaglutide in a head-to-head trial, achieving greater improvements in blood sugar control and weight loss among adults with type 2 diabetes.

These clinical trials underscore Eli Lilly’s ongoing efforts in diabetes research and treatment. Furthermore, Cantor Fitzgerald reiterated its Overweight rating on Eli Lilly with a price target of $825, highlighting the positive reception of recent clinical trial data by medical professionals. BMO Capital also maintained its Outperform rating on the stock, setting a price target of $840 following the publication of complete ATTAIN-1 trial data. These analyst ratings reflect a strong endorsement of Eli Lilly’s recent advancements and market potential.

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