Source: Wall Street News

She made her first public appearance after losing 100 pounds. Overnight, Jia Ling occupied the hot lists on various social platforms and became a new role model for many weight loss seekers.

There are still many people who want to lose weight painlessly as Jia Ling, but it is still hard to find a dose of “magic medicine for weight loss.”

The good news is that Novo Nordisk and Eli Lilly are working to change this situation, and both companies have made encouraging progress in increasing the supply of GLP-1 diet pills.

“Weight loss duo” accelerates production expansion

Novo Nordisk said last week that compared to previous months, the supply of low-dose Wegovy injections in January more than doubled, which will meet the weight loss needs of more people. Since May of last year, supply shortages have forced Novo Nordisk to limit the supply of low-dose diet pills in the US.

Wegovy in doses of 0.25, 0.5, 1, and 1.7 mg is still “limited in supply,” according to data released Monday by the Food and Drug Administration (FDA) Drug Shortage Database. Obese patients usually start with a dose of 0.25 mg and increase the dose over time to reduce side effects such as nausea.

Novo Nordisk executives said during the fourth quarter earnings call last week that the company plans to gradually increase Wegovy's supply during the year.

Similarly, Eli Lilly executives said during the fourth-quarter earnings call on Tuesday that the company has achieved its goal of doubling the production capacity of its intestinal insulin medications by the end of 2023.

Eli Lilly's diabetes drug Mounjaro and diet drug Zepbound are both intestinal insulin stimulants that suppress appetite and regulate blood sugar by mimicking intestinal hormones. According to the FDA, the supply of some doses of Mounjaro is also limited.

Executives said Eli Lilly will “urgently” expand production this year, and the most significant increase in production will occur in the second half of the year. At that time, production of marketable doses of insulin drugs will increase at least 1.5 times compared to the second half of 2023.

Speaking about the supply issue, Cantor Fitzgerald analyst Louise Chen said, “I think this problem will take a few years to resolve on its own, but both companies will slowly begin to meet market demand.”

Novo Nordisk buys Catalent, Wegovy supply is expected to increase

Novo Nordisk said on Monday that Novo Holdings, the controlling shareholder of Novo Nordisk, agreed to buy pharmaceutical filling giant Catalent at a price of $16.5 billion (including debt).

Catalent is a major supplier of Wegovy's filling work, including the filling and packaging of syringes and pens.

As part of the deal, Novo Holdings will resell the three most critical sites in Catalent to Novo Nordisk for $11 billion. Novo Nordisk said that the three major bases will be gradually put into operation starting in 2026.

Novo Nordisk is currently planning to build a new plant or add more production lines to existing plants. TD Cowen analyst Michael Nedelcovych wrote in a report on Tuesday that compared to these initiatives, the acquisition of Catalent may help Novo Nordisk “increase production faster” and is more cost-effective.

Eli Lilly's chief financial officer Anat Ashkenazi told investors during the earnings call on Tuesday that the company was concerned about the acquisition because Eli Lilly signed a contract with Catalent to produce some of its drugs.

However, Cantor Fitzgerald's Chen said that Lilly believes Catalent has no important production business, so this acquisition may have little impact on Eli Lilly's pharmaceutical production.

New plants or increase long-term supply

Novo Nordisk and Eli Lilly are investing billions of dollars to build new production sites to increase the supply of weight loss and diabetes medications over the next few years.

On Tuesday local time, Eli Lilly said that its new plant in Concord, North Carolina, will start producing intestinal insulin drugs as early as the end of this year and ship them in 2025. The plant in Triangle Park, North Carolina also began production last year.

Morgan Stanley analysts said in a report on Sunday that the two plants are expected to help Eli Lilly significantly increase the production capacity of Mounjaro, Zepbound, and another of its diabetes drugs, Trulicity.

Eli Lilly will also build some other facilities in the next few years. The company said in November last year that it would spend 2.5 billion US dollars to build a production base for injectable products in Germany, and construction will begin this year.

Prior to that, Eli Lilly had invested more than $3 billion to build two new manufacturing plants in Indiana.

Meanwhile, Novo Nordisk said in November last year that it will invest 6 billion US dollars to expand its production base in Denmark, and the construction period will last from the end of 2025 to 2029. Novo Nordisk also said it will spend about 2.3 billion US dollars to build a new factory in France.

Alternative diet pills will supplement supply

Replacement, the “magic drug for weight loss,” may also help ease future supply restrictions.

Eli Lilly plans to launch Mounjaro injections called KwikPen in certain markets outside of the US, saying this will help expand the supply of intestinal insulin drugs. The drug has received UK approval.

KwikPen is a four-dose injection pen that covers a one-month treatment period. Patients using autoinjectors need to use four injection pens per month.

Wells Fargo analyst Mohit Bansal wrote in a report last month that if Eli Lilly launches diabetes and weight loss drugs in the US in the form of KwikPen, it could become a “source of increased supply” for the 2025 market.

But Eli Lilly and analysts say oral weight loss and diabetes medications are generally easier to manufacture and cheaper, and will be the key to meeting demand.

Additionally, Eli Lilly is developing an oral GLP-1 diet drug called Orforglipron, which may have an advantage over Pinot and Nord's and Pfizer's experimental diet pills.

In an interim trial, Eli Lilly's drug helped overweight/obese patients lose 14.7% of their body weight after 36 weeks, consistent with the weight loss of Novo Nordisk oral medication, but took less time.

However, orforglipron will not be marketed soon, and Lilly may release late-stage trial data for the drug in 2025.

Editor/Corrine