As Eli Lilly Sees Revenue Surge, Indiana's Biotech Market Is Along For The Ride
Pharmaceutical giant Eli Lilly has just come off of a massive spike in its stock price, a 15% jump that added $64B to its market cap due to a stellar second-quarter earnings report.
This windfall, which saw revenues jump 28% to $8.3B, underscores the company’s recent good fortune. It launched 20 drugs in the past decade and just became the highest-valued drugmaker in the world by market cap. That raises the question of how that impact will help grow the biotech industry in its home state of Indiana.
Participants in the Indiana and Indianapolis biotech industries said it is going beyond the typical ripple effects of a large employer and is now helping seed what is already recognized as a growing biotech market.
A CBRE report found Indianapolis had received $240M in National Institutes of Health funding in 2022 and boasted 2,930 life sciences researchers focused on bioengineering and biomedical engineering. Fishers, a nearby suburb, has attracted $750M in investment since 2020.
Lilly has invested in high-profile new facilities in the kind of coastal biotech hubs where real estate and venture capital investment, as well as talent, are concentrated, including an additional $450M in a manufacturing site in North Carolina, a $700M Eli Lilly Institute for Genetic Medicine in Boston and plans to invest in a large site in South San Francisco.
The company also said last year that it would seek some employment growth out of state due to Indiana's recently enacted ban on abortions unless the mother's life or health is at serious risk.
But Eli Lilly has also been investing in local growth.
“We're investing at record levels in our home state to help our communities and economy thrive and enhance educational opportunities for more students,” Dave Ricks, Lilly’s chair and CEO, said in a statement. “We look forward to doing our part to make Indiana an even better place to work and live, while fostering cutting-edge innovation in our state.”
An Eli Lilly spokesperson said the firm wasn’t able to respond to a request for additional comments before press time.
Lilly’s growth, after hitting a low point about a decade ago, has been key to the boom in local biomanufacturing, in particular, making the area a leader in the field. Earlier this year, the firm announced additional investment in the LEAP Innovation Park in nearby Boone County, roughly 30 miles northwest of its headquarters, adding $1.6B to what is now a $3.7B total investment in the biomanufacturing center.
Like many firms with large footprints, Lilly has also created an ecosystem of talent, often with the resources and connections to split off and start their own firms.
Gate Neuro, an Indiana-based startup co-founded in part by former Lilly employees, just signed a lease for a space in Evanston, Illinois, a northern suburb of Chicago that is home of Northwestern University and near the city’s growing biotech industry.
But Gate Neuro continues to grow in its home state, partners with Eli Lilly and believes the pharma giant is helping build a life sciences ecosystem in Indianapolis that will make it likely more startups will be based there and more labs will be built, according to Head of Corporate Development Rob Houghtaling.
Eli Lilly has also pledged more than $60M in scholarships to Ivy Tech Community College and Purdue University to support biomanufacturing and biotech jobs.
During a recent interview with Inside Indiana Business, Alan Palkowitz, president and CEO of the Indiana Biosciences Research Institute in Indianapolis, said the growth of the state’s biotech industry from $32B to $80B over the last 25 years was due in part to the creation of the 16 Tech Innovation District, funded by the Lilly Endowment, fueled by proceeds of Eli Lilly stock. The foundation made $1.3B in grants last year, and in its lifetime, it has invested in more than 10,000 charitable groups, with the majority based in Indiana.
The opening of the 50-acre tech hub has been a boon to the industry locally. In 2022, 37 local firms secured roughly $620M in VC investment. In addition, a regional bid to land a tech hub in Bloomington, Indiana, an industry push to take advantage of funding opportunities presented by the CHIPS and Science Act of 2022, was announced earlier this month.
