Injection pens of Novo Nordisk’s weight loss drug Wegovy are seen in this photo illustration in Oslo, Norway, on November 21, 2023.
Victoria Klesty | Reuters
The insatiable demand for weight loss medications limits supply, leaving many patients struggling to find injectable medications.
The dominant manufacturers of weight loss drugs, Novo Nordisk And Eli Lilly, have said the supply problems are unlikely to go away anytime soon as the popularity of these drugs continues to rise. But both companies are showing encouraging progress in their efforts to increase supply.
“I think it will take a few years for the problem to resolve itself,” Cantor Fitzgerald analyst Louise Chen told CNBC about the supply issues. “But I think both companies will slowly start to meet the demand in the market.”
Patients are flocking to weight-loss medications like Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound because these treatments help them shed significant pounds over time, despite the drugs’ high prices, mixed insurance coverage and a handful of unpleasant side effects.
Analysts at Goldman Sachs predict that 15 million U.S. adults will be taking obesity medications by 2030. Some Wall Street analysts believe the weight-loss drug market could be worth $100 billion by the end of the decade.
As demand increases sharply, there are temporary shortages of most medications. However, there is limited data on how large the shortages are or how many suppliers companies have.
“I keep hearing about patients going to pharmacies that just don’t have it in stock, especially since the summer,” said Dr. Jeff Friedman, the director of bariatric surgery at the University of Florida, who also prescribes anti-obesity medications.
But both Novo Nordisk and Eli Lilly updated investors on positive supply developments last week. They rounded out 2023 with a handful of new investments to expand production capacity for their weight loss and diabetes medications.
These efforts are aimed at reassuring concerned investors that they can benefit from the success of the treatments and patients that they have access to the treatments. Novo Nordisk and Eli Lilly are trying to maintain their lead in the market like other companies such as B. to claim Amgen, Pfizer, AstraZeneca, Roche and smaller obesity drug makers are pushing to enter the market.
Drug manufacturers enter 2024 with advances in supply
Novo Nordisk said last week that it more than doubled its offering of lower-dose versions of its weight-loss shot Wegovy in January compared to previous months, which will allow more people to start taking the drug. Due to shortages, Novo Nordisk has been forced to limit the availability of these lower “starter” doses in the U.S. since May.
There is still “limited availability” of 0.25-, 0.5-, 1- and 1.7-milligram doses of Wegovy, according to an update to the Food and Drug Administration’s drug shortage database on Monday. Patients typically start with a dose of 0.25 milligrams and increase the dose over time to relieve side effects such as nausea.
Novo Nordisk plans to gradually increase Wegovy offerings over the rest of the year, executives said on its fourth-quarter earnings call last week.
An Eli Lilly and Company pharmaceutical manufacturing facility is pictured March 5, 2021 in Branchburg, New Jersey.
Fresh Mike | Reuters
Certain doses of Eli Lilly’s diabetes drug Mounjaro, which uses the same active ingredient as Zepbound, are also in limited supply, according to the FDA. Both treatments are incretin medications that mimic gut hormones to suppress appetite and regulate blood sugar.
Still, Eli Lilly met its goal of doubling production capacity for such incretin drugs by the end of 2023, executives said during its 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.
At this point in the year, the company expects production of salable doses of incretin drugs to be at least 1.5 times higher than in the second half of 2023, executives said.
The deal with Catalent could increase the Wegovy offering
Novo Nordisk and its parent company Novo Holdings have announced multi-billion dollar deals that could increase the Wegovy offering – just not yet.
Novo Holdings announced Monday that it will acquire the drugmaker Catalent in a $16.5 billion deal. Catalent is the main supplier for fill-finish work, which involves filling and packaging syringes and injection pens for Wegovy.
Novo Nordisk will then purchase three Catalent manufacturing sites from Novo Holdings for $11 billion. Novo Nordisk said the purchase will gradually increase the company’s production capacity starting in 2026.
A general view of the biologics and sterile injectables drug manufacturing laboratory, Catalent, in Brussels, Belgium, June 27, 2023. REUTERS/Yves Herman
Yves Herman | Reuters
In a note Tuesday, TD Cowen analyst Michael Nedelcovych wrote that the Catalent deals would likely “ramp up production faster” than building entirely new facilities or adding more production lines to existing sites, moves that Novo Nordisk is still pursuing. Those efforts are “more expensive and time-consuming” than the acquisition, he noted.
Eli Lilly CFO Anat Ashkenazi told investors during a conference call Tuesday that the company has concerns about its acquisition of Novo Holdings, especially since Eli Lilly hires Catalent to make some of its drugs.
But Eli Lilly has said there is no significant production from Catalent, so the acquisition may have little impact on the business, Cantor Fitzgerald’s Chen said.
New systems could increase supply in the long term
Novo Nordisk and Eli Lilly have both poured billions into building new manufacturing facilities that could boost supplies of their weight-loss and diabetes drugs in the coming years.
On Tuesday, Eli Lilly said a new plant in Concord, North Carolina, would begin producing incretin drugs as early as the end of the year, with products capable of shipping in 2025.
In a note Sunday, Morgan Stanley analysts said they expect that facility and one in Triangle Park, North Carolina, that began production last year to help the company expand its capacity to supply auto-injector molds of Mounjaro, Zepbound and Eli Lilly’s other diabetes drug Trulicity. Autoinjectors are the traditional delivery devices for these medications.
The company will also build a handful of additional facilities in the next few years. Eli Lilly said in November it would spend $2.5 billion to open an injectables manufacturing facility in Germany, with construction expected to begin this year.
The drugmaker has also invested more than $3 billion to build two new manufacturing facilities in its home state of Indiana.
Meanwhile, Novo Nordisk announced in November that it would invest $6 billion to expand its production sites in Denmark, saying construction would be completed from late 2025 to 2029. The company also announced that it would spend around $2.3 billion to build another manufacturing facility in Denmark and France.
Other forms of weight loss medications may help
Alternative forms of weight loss medications could also help alleviate supply shortages in the future.
Eli Lilly has limited capacity to produce auto-injectors for Mounjaro and Zepbound. As a result, the company plans to launch Mounjaro in a delivery device called the KwikPen in certain countries outside the United States. The method requires additional regulatory approvals. The UK recently approved Mounjaro in KwikPen form.
The drugmaker said the introduction of the KwikPen forms of its incretin medications will expand offerings. That’s because Eli Lilly has been using this device for insulin for years, allowing the company to use existing manufacturing resources to make more other incretin medications.
KwikPen is a single four-dose pen that covers one month of treatment. Patients using autoinjectors require four different pens each month.
Wells Fargo analyst Mohit Bansal wrote in a note last month that if Eli Lilly launches its diabetes and weight loss drugs in KwikPen form in the U.S., it could be a “supply source” for the market in 2025 .
But both Eli Lilly and analysts have said oral forms of weight-loss and diabetes drugs, which are typically easier and cheaper to produce, will be key to meeting demand.
Eli Lilly is developing an oral drug called orforglipron that may have an advantage over Novo Nordisk’s experimental weight loss pills Pfizer.
Eli Lilly’s pill helped overweight or obese patients lose up to 14.7% of their body weight after 36 weeks in a medium-sized study. The result appeared to be consistent with the weight loss caused by Novo Nordisk’s oral medication, but over a shorter trial period.
Still, Eli Lilly may release late-stage test data on the pill in 2025, so it won’t be coming to market any time soon.
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2024-02-10 13:00:01
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