Injection pens of Novo Nordisk's weight loss drug Wegovy are shown in this photo illustration in Oslo, Norway, November 21, 2023.
Victoria Klesty | Reuters
The insatiable demand for weight loss medications limits supply, leaving many patients struggling to find injectable treatments.
The Dominant Weight Loss Drug Manufacturers, Novo Nordisk And Eli Lilly, have said that 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 of the supply issues. “But I think both companies will slowly start to meet market demand.”
Patients have been flocking to weight-loss medications like Novo Nordisk's Wegovy and Eli Lilly's Zepbound because the treatments help them shed significant pounds over time, despite the drugs' high price tags, mixed insurance coverage, and a handful of unpleasant side effects.
Analysts at Goldman Sachs expect that 15 million American adults will be taking anti-obesity medications by 2030. Some Wall Street analysts predict that the weight-loss drug market could be worth $100 billion by the end of the decade.
As demand rises, most medications have run into periodic shortages. But there is limited data available on how big the shortages are and how much supply companies have.
“I hear all the time about patients going to pharmacies that just don't have it in stock, especially since the summer,” says Dr. Jeff Friedman, director of bariatric surgery at the University of Florida, who also prescribes for obesity. medicines.
But both Novo Nordisk and Eli Lilly gave investors updates on positive supply developments over the past week. They ended 2023 with a handful of new investments in expanding manufacturing capacity for their weight loss and diabetes drugs.
These efforts are intended to reassure concerned investors that they can benefit from the success of the treatments and to reassure patients that they can access the treatments. Novo Nordisk and Eli Lilly are trying to maintain their lead in the market, as are other companies such as Amgen, Pfizer, AstraZeneca, Roche and smaller obesity drugmakers are rushing to join the space.
Drug manufacturers are kicking off 2024 with advances in supply
Novo Nordisk said last week it was more than doubling its supply of lower-dose versions of its weight-loss injection Wegovy in January compared to previous months, allowing more people to start using the drug. Shortages have forced Novo Nordisk to limit the availability of these lower “starting doses” in the US since May.
There is still “limited availability” of 0.25, 0.5, 1 and 1.7 milligram doses of Wegovy, according to a Monday update on the Food and Drug Administration's drug shortage database. Patients typically start with the 0.25 milligram dose and increase the dose over time to reduce side effects such as nausea.
Novo Nordisk plans to gradually increase Wegovy's offering over the rest of the year, executives said last week during the company's fourth-quarter earnings call.
An Eli Lilly and Company pharmaceutical factory is pictured in Branchburg, New Jersey, March 5, 2021.
Mike Segar | 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, which mimic intestinal hormones to suppress appetite and regulate blood sugar levels.
Still, Eli Lilly has achieved its goal of doubling production capacity for such incretin drugs by the end of 2023, executives said Tuesday during the company's quarterly earnings call. They said the company will expand production this year with “equal urgency,” with the biggest production increases coming in the second half of the year.
By that point in the year, the company expects production of marketable doses of incretin drugs to be at least 1.5 times higher than in the second half of 2023, executives said.
The Catalent deal could boost Wegovy's supply
Novo Nordisk and its parent company, Novo Holdings, have unveiled billion-dollar deals that could boost Wegovy's supply — but not yet.
Novo Holdings said Monday it will acquire the drug manufacturer Catalent in a $16.5 billion deal. Catalent is Wegovy's main supplier of filling work, i.e. the filling and packaging of syringes and injection pens.
Novo Nordisk will then buy three Catalent manufacturing sites from Novo Holdings for $11 billion. Novo Nordisk said the purchase will gradually increase the company's production capacity from 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 are likely to “stimulate production faster” than building entirely new factories or adding more production lines to existing sites, steps that Novo Nordisk is still pursuing. These efforts are “more expensive and time-consuming” than the acquisition, he noted.
Eli Lilly CFO Anat Ashkenazi told investors during an earnings call Tuesday that the company is concerned about its acquisition of Novo Holdings, especially because Eli Lilly contracts Catalent to produce some of its drugs.
But Eli Lilly has said there will be no meaningful production from Catalent, so the acquisition may have little effect on its business, Cantor Fitzgerald's Chen said.
New factories could increase supply in the long term
Novo Nordisk and Eli Lilly have both poured billions into building new manufacturing sites that could increase supply of their weight loss and diabetes drugs in the coming years.
On Tuesday, Eli Lilly said a new factory in Concord, North Carolina, will begin producing incretin drugs as early as the end of the year, with products available for shipment in 2025.
In a note Sunday, Morgan Stanley analysts said they expect this facility and one in North Carolina's Triangle Park, which began production last year, will help the company expand its capacity to supply autoinjector molds from 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 other facilities in the coming years. Eli Lilly said in November it would spend $2.5 billion to open an injectables manufacturing site in Germany, with construction 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 said in November it would invest $6 billion to expand its manufacturing sites in Denmark, noting that construction will be completed from late 2025 to 2029. The company also said it would spend about $2.3 billion to build another manufacturing facility in Denmark. France.
Other forms of weight loss medications can help
Alternative forms of weight loss medications may also help alleviate supply constraints in the future.
Eli Lilly has limited capacity to make autoinjectors for Mounjaro and Zepbound. Therefore, the company plans to launch Mounjaro in select countries outside the US in a delivery device called KwikPen. The method requires additional regulatory approvals. The United Kingdom recently approved Mounjaro in KwikPen form.
The drugmaker has said the launch of KwikPen forms of its incretin drugs will increase supply. That's because Eli Lilly has been using that device for insulin for years, so the company can tap existing manufacturing resources to make more of other incretin drugs.
KwikPen is a four-dose pen, good for a month's treatment. Patients using auto-injectors cycle through four different pens per month.
Wells Fargo analyst Mohit Bansal wrote in a note last month that if Eli Lilly were to launch its diabetes and weight loss drugs in the form of KwikPen in the US, it could be an “upside source of supply” in the market before 2025.
But both Eli Lilly and analysts have said oral forms of weight loss and diabetes drugs, which tend to be easier and cheaper to produce, will be key to meeting demand.
Eli Lilly is developing an oral drug called orforglipron that may have an edge over Novo Nordisk's experimental weight-loss pills 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 study. The result appeared to be consistent with the weight reduction caused by the Novo Nordisk oral drug, but over a shorter trial period.
Still, Eli Lilly may release late-stage research data on the pill in 2025, so it won't hit the market anytime soon.