Examining the Lehigh Valley’s historic industrial sites along the Lehigh River evokes a bygone era when the region was home to one of the largest steel production centers in the world. Today, recent investments point to a new manufacturing renaissance, driven by a strategic shift toward life sciences.
The zenith of this change came when Eli Lilly selected Lehigh Valley, an area in eastern Pennsylvania, for a new $3.5 billion facility to produce the drugmaker’s next wave of weight-loss therapies.
The investment marked the largest of its kind in the life sciences sector in Pennsylvania history. With the U.S. weight loss market expected to be worth $148.7 billion by 2031 (the year the facility is scheduled to come online), the Lehigh Valley will play a critical role in meeting demand for medications.
During the announcement in January 2026, Pennsylvania Governor Josh Shapiro said, “We are poised for explosive innovation and growth in the life sciences industry, and that is exactly why Eli Lilly chose us for its $3.5 billion investment.”
For Don Cunningham, executive director of the Lehigh Valley Economic Development Corporation (LVEDC), the work had been going on behind the scenes for a while. The process began in the summer of 2024, when the agency, responsible for attracting new companies to the region, began courting Eli Lilly for a different pharmaceutical facility.
“We did a lot of data analysis on where people worked, what their skills were, where they lived, and then we started working with community colleges around a technical training path that would fit with Lilly,” Cunningham says. Pharmaceutical technology.
“We really doubled down on the workforce side. We knew we had a significant amount of pharmaceutical talent.”
In the end, Lehigh Valley would fall short in its initial plant efforts. Despite being among the last two shortlisted candidates, Lilly awarded the contract to fellow mid-Atlantic state Virginia. Plans were revealed in September 2025, with Lilly deciding to build an active pharmaceutical ingredients (API) and pharmaceuticals facility at the site. It marked the first announcement of four new mega-manufacturing facilities the drugmaker aims to build in the United States as part of a $27 billion investment campaign.
“Lilly said the way we reacted to not winning the initial project was very helpful. We knew there were other facilities that hadn’t been announced. And Lilly’s site selection people were already familiar with our site,” Cunningham says.
Lehigh Valley was successful in the second round, beating out more than 300 applicants. In a statement, Lilly said it selected the site in Fogelsville for its proximity to STEM universities, strong technical manufacturing economy and established infrastructure. Additionally, the pharmaceutical giant highlighted the region’s convenient access to public services and transportation, as well as its favorable zoning and business incentives.
In an unforeseen benefit to the Lehigh Valley, the project was larger in both investment size and number of jobs, marking a significant boost to the region’s life sciences sector. Lilly is looking to hire about 850 employees at the facility, with roles for engineers, scientists, operations staff and laboratory technicians.
Lilly employees will join a Lehigh Valley workforce that has grown significantly in recent times. Employment in the region’s life sciences sector has grown by approximately 36% over the past decade, to a total of around 5,900 workers. Since 2020, life sciences companies in the region have added more than 2.5 million square feet of space.
For Lehigh Valley, the decision to double down on life sciences made geographic sense. The area is close to Philadelphia, Pennsylvania’s largest city, along with New Jersey and Maryland, both states famous for their pharmaceutical centers.
“We’ve been the hole in the middle of the donut where, although we had parts of the supply chain like packaging, we never had drug production,” Cunningham explains.
Lilly’s arrival signals a pharmaceutical presence that complements a broader, well-established healthcare residency in the area. This includes B. Braun, Olympus and Thermo Fisher Scientific, among others.
In an additional boost to the neighboring pharmaceutical scene, Johnson & Johnson (J&J) also announced in February that it plans to build a billion-dollar cell therapy manufacturing facility in Montgomery County, Pennsylvania, which is about a 45-minute drive from the Lehigh Valley. For Pennsylvania’s former steel hub, more could be on the way.
“Since Lilly’s announcement, we have received many inquiries from the pharmaceutical supply chain industry. When a company the size of Lilly chooses an area, a trail of companies often follows,” he says.
Cunningham points to two factors that helped Pennsylvania close the deal with Lilly. The first was a byproduct of the CHIPS and Science Act, which was signed into law by former President Joe Biden in 2022 to support semiconductor production in the United States. Consequently, that same year the Pennsylvania Economic Development for a Growing Economy (PA EDGE) tax credit program was established, designed to attract investment into critical manufacturing sectors. Fundamentally, the plan covered the biological sciences. For LVEDC’s Lilly project, this created a favorable incentive package for the state.
Second, Cunningham points out, is the region’s deep manufacturing legacy. For about 100 years, the Lehigh Valley was one of the largest steel producers in the world, courtesy of steel titan Bethlehem Steel which has its main factory there. The region was a symbol of the decline of America’s Rust Belt in the late 20th century. Although it closed in 2003, the company’s 1,600-acre plant still sits along the Lehigh River and serves as a cultural and entertainment center.
To this day, manufacturing remains a critical feature of the region: the sector is responsible for 16% of the Lehigh Valley’s GDP, above the US average of 11%.
Cunningham says, “Our work has been based on our manufacturing history and culture that already exists here, tied to families who have been here for generations and send their children to vocational and technical schools.”
“It’s like a band that’s been playing bars for 25 years and suddenly gets a hit on the charts. It’s an overnight discovery that, frankly, has been going on for a while.”
“How America’s Former Steel Heart Landed a $3.5 Billion Eli Lilly Facility” was created and originally published by Pharmaceutical Technology, a brand owned by GlobalData.
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