German chemical firm to buy Lilly's plant in Lafayette, Ind.*

Eli Lilly & Co (LLY.N) said on Wednesday that it had agreed to sell one of its manufacturing facilities to German chemical company Evonik Industries AG EVON.UL as it braces for generic competition to several of its most important drugs.

The Indianapolis-based drugmaker said it would take a charge of 23 cents a share in the third quarter to cover restructuring costs and asset impairment.

Lilly said about 700 employees at its Tippecanoe Laboratories facility in Lafayette, Indiana, would be offered new employment at Evonik. The plant produces active pharmaceutical ingredients and specialty chemicals.

Financial terms of the deal were not disclosed.

Lilly said in September that it planned to cut 5,500 jobs, or 13.5 percent of its 40,500-strong workforce by the end of 2011 as it prepares to lose patent protection on its top-selling schizophrenia drug Zyprexa and cancer drug Gemzar.

The company said the Tippecanoe facility would remain in operation and continue to supply Lilly with ingredients for some human and animal health products under a multiyear contract with Evonik.

Lilly has said it expected to record a 2009 profit of $4.20 to $4.30 a share and create a new organizational structure focusing on five business units in oncology, diabetes, emerging markets, established markets and animal health.

Shares of Lilly rose 32 cents, or 1 percent, to $33.68 in morning trading on the New York Stock Exchange.
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