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
Insatiable demand for weight-loss drugs is overwhelming supply, leaving many patients scrambling to find injectable treatments.
The main manufacturers of weight loss drugs, Novo Nordisk And Elie Lilly, said the supply problems likely won't go away anytime soon as the popularity of these drugs continues to soar. 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,” Louise Chen, an analyst at Cantor Fitzgerald, 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 shed significant pounds over time, despite the drugs' high prices, mixed insurance coverage and a handful of 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 reduced. worth 100 billion dollars by the end of the decade.
As demand increases, most drugs have fallen into intermittent shortages. But there is little data available on the scale of the shortages or how much supply companies have.
“I hear all the time about patients going to pharmacies that just don't have any in stock, especially since the summer,” said Dr. Jeff Friedman, director of bariatric surgery at the University of Florida, which also prescribes obesity medications. drugs.
But both Novo Nordisk and Eli Lilly provided updates on the positive developments in the offering to investors over the past week. They closed out 2023 with a handful of new investments aimed at increasing production capacity for their weight loss and diabetes drugs.
These efforts aim to reassure anxious investors that they can capitalize on the success of treatments and to reassure patients that they can access treatments. Novo Nordisk and Eli Lilly seek to maintain their market advantage as other companies such as Amgen, Pfizer, AstraZeneca, rock and small obesity drugmakers are rushing to join the space.
Novo Nordisk said last week it had more than doubled its supply of lower-dose versions of its Wegovy weight loss injection in January compared to previous months, which will allow more people to start taking the drug. Shortages have forced Novo Nordisk to restrict the availability of these lower “starter” doses in the United States since May.
There is still “limited availability” of Wegovy doses of 0.25, 0.5, 1 and 1.7 milligrams, according to a Monday update to the Food and Drug Administration's drug shortage database . Patients typically start with a dose of 0.25 milligrams and increase the size over time to ease side effects such as nausea.
Novo Nordisk plans to gradually increase Wegovy's supply for the remainder of the year, executives said during the company's fourth-quarter earnings conference call last week.
An Eli Lilly and Company pharmaceutical manufacturing facility is pictured in Branchburg, New Jersey on March 5, 2021.
Mike Segar | Reuters
According to the FDA, certain doses of Eli Lilly's diabetes drug Mounjaro, which uses the same active ingredient as Zepbound, also have limited availability. Both treatments are incretin medications, which mimic gut hormones to suppress appetite and regulate blood sugar.
Eli Lilly nevertheless achieved its goal of doubling its production capacity for these incretin drugs by the end of 2023, company executives said Tuesday during the company's fourth-quarter earnings conference call. Company. They said the company would increase production with “the same urgency” this year, with the most significant production increases occurring in the second half of the year.
At this point in the year, the company expects its production of salable doses of incretin drugs to be at least 1.5 times what it was in the second half of 2023, its sources said. leaders.
Catalent deal could boost Wegovy's supply
Novo Nordisk and its parent company, Novo Holdings, have unveiled multibillion-dollar deals that could increase Wegovy's supply — but not yet.
Novo Holdings announced Monday the acquisition of a drugmaker Catalent as part of a $16.5 billion deal. Catalent is the primary provider of fill-finish work, which involves the filling and packaging of syringes and injector pens, for Wegovy.
Novo Nordisk will then buy three of Catalent's manufacturing sites from Novo Holdings for $11 billion. Novo Nordisk said the purchase would gradually increase the company's manufacturing capacity from 2026.
A general view of the pharmaceutical manufacturing laboratory in sterile biological and injectable products, Catalent, in Brussels, Belgium June 27, 2023. REUTERS/Yves Herman
Yves Herman | Reuters
In a note published Tuesday, TD Cowen analyst Michael Nedelcovych wrote that the deals with Catalent “will likely increase production more quickly” than building entirely new factories or adding additional production lines to the sites. existing measures, which Novo Nordisk is still pursuing. These efforts are more “costly and time-consuming” than acquisition, he noted.
Eli Lilly Chief Financial Officer Anat Ashkenazi told investors during an earnings conference call Tuesday that the company had concerns on the acquisition of Novo Holdings, especially since Eli Lilly hires Catalent to manufacture some of its drugs.
But Eli Lilly said there was no significant production coming from Catalent, so the acquisition might have little effect on its business, Cantor Fitzgerald's Chen said.
Novo Nordisk and Eli Lilly have both invested billions in building new production sites that could increase the supply of their weight loss and diabetes drugs in the coming years.
On Tuesday, Eli Lilly said a new factory in Concord, North Carolina, would begin producing incretin drugs as soon as the end of the year, with products potentially shipping in 2025.
In a note released Sunday, Morgan Stanley analysts said they expected that facility and the Triangle Park facility in North Carolina, which began production last year, to help the company increase significantly its capacity to supply auto-injector forms of Mounjaro, Zepbound and Eli Lilly's other diabetes drug, Trulicity. . Auto-injectors are the traditional delivery devices for these medications.
The company will also build a handful of other facilities over the next few years. Eli Lilly said in November it would spend $2.5 billion to open a manufacturing site for injectable products in Germany, construction of which will begin this year.
The drugmaker also invested more than 3 billion dollars to build two new production facilities in its home state of Indiana.
Meanwhile, Novo Nordisk announced in November that it would invest 6 billion dollars to expand its manufacturing sites in Denmark, saying it will complete construction between late 2025 and 2029. The company also said it would spend approximately $2.3 billion to build another production unit in France.
Alternative forms of weight loss drugs could also help ease supply constraints in the future.
Eli Lilly has limited capacity to manufacture auto-injectors for Mounjaro and Zepbound. So, the company plans to launch Mounjaro in a delivery device called KwikPen in some countries outside the United States. The method requires additional regulatory approvals. Great Britain recently approved Mounjaro in KwikPen form.
The drugmaker said the launch of KwikPen forms of its incretin drugs would increase supply. Indeed, Eli Lilly has used this device for years for insulin, so the company can leverage existing manufacturing resources to make more other incretin drugs.
KwikPen is a single, four-dose pen that covers one month of treatment. Patients using auto-injectors go through four different pens per 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 United States, it could be a “source of supply.” on the rise” on the market for 2025.
But Eli Lilly and analysts said oral forms of weight loss and diabetes drugs, which are generally easier and cheaper to make, will be key to meeting demand.
Eli Lilly is developing an oral drug called orforglipron, which could have an advantage over experimental diet 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-term trial. The result appears to match the weight reduction caused by Novo Nordisk's oral drug, but over a shorter trial period.
Still, Eli Lilly may release advanced trial data on the pill in 2025, so it won't enter the market anytime soon.