Injection pens of Novo Nordisk’s weight loss drug Wegovy are seen in this photo in Oslo, Norway, November 21, 2023.
Victoria Klesty | Reuters
The insatiable demand for weight loss drugs is crushing supply, leaving many patients struggling to find injectable treatments.
The mainstream weight loss drugs, Novo Nordisk and Eli Lilly, reported that supply issues likely won’t go away anytime soon as the popularity of these drugs continues to soar. But both companies are making encouraging progress in their efforts to increase supply.
“I think it will take a couple of years to sort itself out,” Cantor Fitzgerald analyst Louise Chen told CNBC of the supply issues. “But I think both companies will slowly start to respond to market demand.”
Patients have flocked to weight-loss drugs such as Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound because the treatments help them lose significant pounds over time, despite high drug prices, patchy insurance coverage and some unpleasant side effects.
Goldman Sachs analysts expect 15 million U.S. adults to take obesity drugs by 2030. Some Wall Street analysts predict the market for weight-loss drugs could be worth $100 billion until the end of the decade.
As demand increases, most of the drugs have slipped into intermittent shortages. However, there is limited data available on how significant the shortages are or how much supply companies have.
“I hear all the time about patients going to pharmacies that just don’t have it in stock for them, especially since the summer,” said Dr. Jeff Friedman, director of bariatric surgery at the University of Florida, who also prescribes obesity. medicines.
However, both Novo Nordisk and Eli Lilly gave updates on positive offering developments to investors last week. They finished 2023 with a handful of new investments in expanding capacity for weight loss and diabetes drugs.
These efforts aim to reassure anxious investors that they can profit from the treatments’ success and reassure patients that they can access the treatments. Novo Nordisk and Eli Lilly are trying to maintain their market advantage as are other companies like e.g Amgen, Pfizer, AstraZeneca, Roche and smaller obesity drugmakers are scrambling to join the space.
Novo Nordisk last week said it had more than doubled supply of lower-dose versions of the Wegovy weight-loss injection in January compared to previous months, which will allow more people to start taking the drug. The shortages forced Novo Nordisk to limit the availability of these lower “starter” doses in the US starting in May.
There is still “limited availability” of Wegovy 0.25, 0.5, 1 and 1.7 milligram doses, according to a Monday update to the Food and Drug Administration’s drug shortage database. Patients usually start with the 0.25-milligram dose and increase the size over time to reduce side effects such as nausea.
Novo Nordisk plans to gradually increase its Wegovy offering over the rest of the year, executives said on the company’s fourth-quarter earnings call last week.
An Eli Lilly and Company pharmaceutical manufacturing plant is pictured in Branchburg, New Jersey, March 5, 2021.
Mike Segar | Reuters
Some doses of Eli Lilly’s diabetes drug Mounjaro, which uses the same active ingredient as Zepbound, also have limited availability, according to the FDA. Both treatments are incretin drugs, which mimic gut hormones to suppress appetite and regulate blood sugar.
But Eli Lilly met its goal of doubling production capacity of such incretin drugs by the end of 2023, executives said during the company’s fourth-quarter earnings call on Tuesday. They said the company would expand production with “equal urgency” this year, with the most significant production increases coming in the second half of the year.
By that point in the year, the company expects its production of salable doses of incretin drugs to be at least 1.5 times higher than it was in the second half of 2023, executives said.
The Catalent deal could boost Wegovy’s offering
Novo Nordisk and its parent company, Novo Holdings, have unveiled multibillion-dollar deals that could increase Wegovy’s supply — not yet.
Novo Holdings announced on Monday that it will acquire the drug maker Catalent in a $16.5 billion deal. Catalent is the main supplier of filling and finishing operations, which include filling and packaging of syringes and injection pens, for Wegovy.
Novo Nordisk will then buy three of Catalent’s manufacturing facilities from Novo Holdings for $11 billion. Novo Nordisk said the purchase would gradually increase the company’s production capacity from 2026.
A general view of the biologics and sterile injectables pharmaceutical production lab, Catalent, in Brussels, Belgium, June 27, 2023. REUTERS/Yves Herman
Yves Herman | Reuters
In a note on Tuesday, TD Cowen analyst Michael Nedelcovych wrote that the Catalent deals will likely “stimulate production faster” than building entirely new plants or adding more production lines to existing facilities, moves that Novo Nordisk is still pursuing to pursue. Those efforts are more “costly and time-consuming” than a buyout, he noted.
Eli Lilly Chief Financial Officer Anat Ashkenazi told investors during an earnings call on Tuesday that the company has worries regarding the acquisition of Novo Holdings, especially since Eli Lilly contracts with Catalent to manufacture some of its drugs.
But Eli Lilly said it has no substantial production from Catalent, so the acquisition may have little effect on its business, Cantor Fitzgerald’s Chen said.
Novo Nordisk and Eli Lilly have invested billions to build new manufacturing sites that could boost their weight-loss and diabetes drug offerings in the coming years.
On Tuesday, Eli Lilly said a new plant in Concord, North Carolina, will begin making incretin drugs as early as the end of the year, with products available for shipment in 2025.
In a note on Sunday, Morgan Stanley analysts said they expect this facility and one in Triangle Park, North Carolina, which began production last year, will help the company significantly increase its capacity to provide Mounjaro auto-injection forms. , Zepbound and Eli Lilly’s other diabetes drug Trulicity. . Auto-injectors are the traditional delivery devices for these drugs.
The company will also build a handful of other facilities in the coming years. Eli Lilly in November said it would spend 2.5 billion dollars to open an injectable manufacturing plant in Germany, with construction to begin this year.
The pharmacist has also invested more than $3 billion for construction two new manufacturing facilities in its home state of Indiana.
Meanwhile, Novo Nordisk in November said it would invest 6 billion dollars to expand its production facility in Denmark, noting that it will complete construction from late 2025 to 2029. The company also said it will spend about $2.3 billion for the construction of another production unit in France.
Alternative forms of weight loss drugs could also help ease supply constraints in the future.
Eli Lilly has limited ability to manufacture autoinjectors for Mounjaro and Zepbound. So the company is planning to release Mounjaro on a delivery device called KwikPen in some countries outside the U.S. The method requires additional regulatory approvals. The UK recently approved Mounjaro in KwikPen format.
The drugmaker said the launch of KwikPen forms of the incretin drugs would broaden the offering. That’s because Eli Lilly has for years used this device for insulin, so the company can leverage its existing manufacturing resources to make more of its other incretin drugs.
The KwikPen is a four-dose pen device that covers one month’s treatment. Patients using automatic infusions go through four different pennies per month.
Wells Fargo analyst Mohit Bansal wrote in a note last month that if Eli Lilly launched its diabetes and weight-loss drugs in KwikPen form in the U.S., it could be an “upside source of supply” in the market for in 2025.
But both Eli Lilly and analysts have said that oral forms of weight-loss and diabetes drugs, which are typically easier and cheaper to manufacture, will be key to meeting demand.
Eli Lilly is developing an oral drug called orforglipron, which may have an edge over experimental weight-loss pills from Novo Nordisk and Pfizer.
Eli Lilly’s pill helped overweight or obese patients lose up to 14.7% of their body weight after 36 weeks in a mid-stage trial. The result appeared to be consistent with the weight reduction caused by Novo Nordisk’s oral drug, but over a shorter trial period.
However, Eli Lilly may release late-stage trial data on the pill in 2025, so it won’t be entering the market anytime soon.