News Release

Eli Lilly and Company has reported to state officials that the company is well on its way to creating more than 7,500 new jobs at its Indianapolis operations as announced in July 1999. At that time, Lilly stated its plan to add 7,500 new jobs and invest $1 billion for new capital expansion to its Indianapolis operations over the next 10 years.

"We are truly in the most challenging time of our company's long history. We are poised to file a record number of new product submissions within the next two to three years. Several of those products will be first-in-class and will address medical problems for which there is no current solution," said Sidney Taurel, Lilly chairman, president and chief executive officer. "We must invest aggressively both to support the commercialization of these new products and to strengthen our research capabilities in order to keep each stage of our research pipeline fully loaded. To do this, we need to grow our global operations even as we manage the expiration of a major product patent.

"At the same time, we are also facing tremendous uncertainties from threats of government-mandated price controls and restricted access to our medicines to the ever-increasing competitive pressures from the marketplace and the steadily increasing cost of research," said Taurel. "These factors will weigh heavily as we make decisions regarding any future expansion plans."

The report, which was submitted to Indiana's Economic Development for Growing Economy (EDGE) board, showed that Lilly added 1,552 new jobs to its Indianapolis operations in 2000, bringing its total to nearly 2,000 new jobs created during the first 24 months of the ambitious 10-year expansion plan. The report is a required documentation to be filed with the state that enables the company to receive EDGE incentives for job growth.

By adding the 2,000 jobs, Lilly already has achieved more than 25 percent of its committed 10-year employment growth of 7,500 new jobs. Many of the new employees are scientists, physicians, computer specialists and marketing professionals - highly educated, highly skilled and highly paid. In 2000, Lilly's total global employment grew by nearly 4,400 employees, bringing its worldwide employment base to 35,746.

In addition to adding the new jobs, Lilly will begin construction on new capital projects at its Indianapolis operations totaling more than $225 million in 2001. In the last two years, the company has either started or financially committed to nearly $900 million in new capital projects to be completed over the course of the next 4 to 5 years. This investment includes construction of new facilities and expansions of existing buildings. So far, the company is significantly ahead of its $1 billion, 10-year commitment.

More than half the investment includes construction of new research and development facilities, which will allow Lilly to create nearly 600 laboratory spaces for scientists engaged in drug discovery and research activities. In 2000, Lilly recruited more than 600 scientists - many in Indiana - bringing its total number of researchers to 6,900 at 11 sites worldwide. The company also increased its global research and development investment by 13 percent, to $2 billion, in 2000. This represents 19 percent of the company's total revenue.

"The heart of our business is discovering and developing new drugs," said Taurel. "Therefore, it's essential that we recruit the top scientists and invest in state-of-the-art research facilities that allow us to effectively move compounds from the laboratory to the patient, and to do so on a global basis."

Overview of New Capital Projects

Building 87 Laboratory (Lilly Corporate Center) - This $100 million facility will house approximately 370 scientists and support personnel engaged in drug discovery research activities. The 275,000 square foot facility should be completed in 2003.

Building 77 South (Lilly Corporate Center) - This $27.3 million expansion will house approximately 77 scientists engaged in drug discovery research activities. The 58,000 square foot facility should be completed in 2002.

Building 110 (Lilly Technology Center) - This $42.5 million expansion will house approximately 140 scientists and support personnel engaged in drug discovery research activities. The 135,000 square foot addition should be completed in 2002.

Building 358 (Lilly Technology Center) - This $10.5 million expansion will be created for the manufacturing of Forteo^TM , Lilly's new bone growth compound. The project will be completed in 2001.

Building 100 (Lilly Technology Center) - This $15 million expansion will be created for the manufacturing of duloxetine, Lilly's pipeline compound for depression and stress urinary incontinence.

Building 132 (Lilly Technology Center) - This $30 million expansion will be created for additional manufacturing capacities for Humulin^® , a Lilly insulin product for people with diabetes.

Lilly, a leading innovation-driven corporation, is developing a growing portfolio of best-in-class pharmaceutical products by applying the latest research from its own worldwide laboratories and from collaborations with eminent scientific organizations. Headquartered in Indianapolis, Ind., Lilly provides answers - through medicines and information - for some of the world's most urgent medical needs. Additional information about Lilly is available at www.lilly.com.