Novo Nordisk, Eli Lilly are tackling provide points

The insatiable demand for weight loss drugs is trouncing supply, leaving many sufferers struggling to seek out the injectable treatments. 

The dominant weight reduction drugmakers, Novo Nordisk and Eli Lilly, have mentioned provide woes possible will not go away anytime quickly, as the recognition of these medicines continues to soar. However each firms are displaying encouraging progress of their efforts to extend provide. 

“I feel it should take a couple of years for it to resolve itself,” Cantor Fitzgerald analyst Louise Chen informed CNBC of the provision points. “However I feel each firms will slowly begin to meet the demand available in the market.” 

Sufferers have flocked to weight reduction medication reminiscent of Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound because the therapies assist them shed vital kilos over time, regardless of the medication’ hefty price tags, combined insurance coverage and handful of unpleasant side effects.

Goldman Sachs analysts anticipate 15 million U.S. adults to be on weight problems medicines by 2030. Some Wall Avenue analysts undertaking that the load loss drug market may very well be worth $100 billion by the top of the last decade.

As demand spikes, a lot of the medication have slipped into intermittent shortages. However there’s restricted knowledge out there on how vital shortages are or how a lot provide firms have.

“I hear on a regular basis about sufferers going to pharmacies that simply do not have it in inventory for them, particularly because the summer time,” mentioned Dr. Jeff Friedman, the director of bariatric surgical procedure on the College of Florida, who additionally prescribes weight problems medicines.

However each Novo Nordisk and Eli Lilly gave updates on positive supply developments to traders during the last week. They rounded out 2023 with a handful of recent investments in increasing manufacturing capability for his or her weight reduction and diabetes medication.

These efforts intention to reassure anxious traders that they’ll capitalize on the success of the therapies and to reassure sufferers that they’ll entry the therapies. Novo Nordisk and Eli Lilly look to keep up their edge available in the market as different firms reminiscent of Amgen, Pfizer, AstraZeneca, Roche and smaller weight problems drugmakers race to affix the area. 

Novo Nordisk final week mentioned it had more than doubled its provide of lower-dose variations of its weight reduction injection Wegovy in January in contrast with earlier months, which can enable extra folks to start out taking the drug. Shortages have pressured Novo Nordisk to limit the supply of these decrease “starter” doses within the U.S. since Might. 

There may be nonetheless “restricted availability” of 0.25, 0.5, 1 and 1.7-milligram doses of Wegovy, based on a Monday replace on the Meals and Drug Administration’s drug scarcity database. Sufferers sometimes begin on the 0.25-milligram dose and improve the scale over time to mitigate negative effects reminiscent of nausea. 

Novo Nordisk plans to steadily improve Wegovy provide the remainder of the yr, executives mentioned on the corporate’s fourth-quarter earnings name final week.

Sure doses of Eli Lilly’s diabetes drug Mounjaro, which makes use of the identical lively ingredient as Zepbound, even have restricted availability, based on the FDA. Each therapies are incretin medication, which mimic intestine hormones to suppress urge for food and regulate blood sugar.

Nonetheless, Eli Lilly achieved its aim of doubling manufacturing capability for such incretin medication by the top of 2023, executives mentioned in the course of the firm’s fourth-quarter earnings name Tuesday. They mentioned the corporate will develop manufacturing with “equal urgency” this yr, with essentially the most vital manufacturing will increase occurring within the second half of the yr. 

By that time within the yr, the corporate expects its manufacturing of sellable doses of incretin medication to be a minimum of 1.5 occasions larger than it was within the second half of 2023, executives mentioned.

Novo Holdings on Monday mentioned it should purchase drug producer Catalent in a $16.5 billion deal. Catalent is the primary provider of fill-finish work, which entails filling and packaging syringes and injection pens, for Wegovy. 

Novo Nordisk will then purchase three of Catalent’s manufacturing websites from Novo Holdings for $11 billion. Novo Nordisk mentioned that buy will steadily improve the corporate’s manufacturing capability beginning in 2026. 

In a be aware Tuesday, TD Cowen analyst Michael Nedelcovych wrote the Catalent offers will possible “increase manufacturing sooner” than constructing totally new vegetation or including extra manufacturing traces to present websites, strikes Novo Nordisk continues to be pursuing. These efforts are extra “costly and time consuming” than the acquisition, he famous.

Eli Lilly CFO Anat Ashkenazi informed traders throughout an earnings name Tuesday that the corporate has concerns about Novo Holdings’ acquisition, particularly since Eli Lilly contracts Catalent to fabricate a few of its medicines. 

However Eli Lilly has mentioned it would not have significant manufacturing coming from Catalent, so the acquisition might have little impact on its enterprise, Cantor Fitzgerald’s Chen mentioned.

The corporate additionally will construct a handful of different amenities over the subsequent few years. Eli Lilly in November mentioned it will spend $2.5 billion to open a producing web site for injectable merchandise in Germany, with development starting this yr.

The drugmaker has additionally invested greater than $3 billion to build two new manufacturing amenities in its dwelling state of Indiana. 

In the meantime, Novo Nordisk in November mentioned it will make investments $6 billion to develop its manufacturing websites in Denmark, noting it should end development from the top of 2025 by way of 2029. The corporate additionally mentioned it will spend around $2.3 billion to construct out one other manufacturing facility in France. 

Eli Lilly has restricted capability to make autoinjectors for Mounjaro and Zepbound. So, the corporate plans to launch Mounjaro in a supply system referred to as KwikPen in sure nations exterior of the U.S. The strategy requires extra regulatory approvals. The UK recently approved Mounjaro in KwikPen type. 

The drugmaker has mentioned launching KwikPen types of its incretin medication will develop provide. That is as a result of Eli Lilly for years has used that system for insulin, so the corporate can faucet into present manufacturing assets to make extra of different incretin medication. 

KwikPen is a single four-dose pen that covers a month’s therapy. Sufferers utilizing autoinjectors undergo 4 totally different pens per thirty days.

Wells Fargo analyst Mohit Bansal wrote in a be aware final month that if Eli Lilly launches its diabetes and weight reduction medication in KwikPen type within the U.S., it may very well be a “supply of provide upside” available in the market for 2025.

However each Eli Lilly and analysts have mentioned that oral types of weight reduction and diabetes medication, that are sometimes simpler and cheaper to fabricate, shall be key to assembly demand.

Eli Lilly is creating an oral drug referred to as orforglipron, which can have an edge over experimental weight reduction capsules from Novo Nordisk and Pfizer. 

Eli Lilly’s capsule helped obese or overweight sufferers lose as much as 14.7% of their physique weight after 36 weeks in a midstage trial. The end result gave the impression to be in line with the load discount attributable to Novo Nordisk’s oral drug, however over a shorter trial interval. 

Nonetheless, Eli Lilly might launch late-stage trial knowledge on the capsule in 2025, so it will not be coming into the market any time quickly.