Source: Securities Times
Author: Chen Lixiang
This Spring Festival, Jia Ling, who lost 100 pounds, was on the hot lists of major online platforms.
Netizens are both distressed and admired: “It's usually not easy to lose three or four pounds”, “Can you imagine how much suffering Jia Ling has suffered”, “Can you recommend a way to lose weight?”
Jia Ling, who successfully lost weight, caused such a stir. Behind it was a huge demand for weight loss.
According to data from the World Obesity Alliance, about 38% of people worldwide had a BMI above 25 in 2020, and the overweight/obesity rate continued to rise. It is estimated that by 2035, more than 4 billion people worldwide will be overweight or obese.
On the domestic side, according to the CaiTong Securities Research Report, as of 2019, the number of overweight and obese people aged 18 and above in China reached 192 million, and the diet drug compliance market is expected to exceed 12 billion yuan in 2025.
According to estimates of market demand, Morgan Stanley estimates that by 2030, the market size of obesity drugs is expected to exceed US$54 billion, which is expected to surpass PD-1/PD-L1 to become the largest drug in the global market.
Currently, GLP-1 drugs, which include simeglutide, are new weight loss drugs, according to J.P. Morgan analysts forecast that annual sales will exceed 100 billion US dollars by 2030, making it a potential 100 billion dollar market (GLP-1 drug indications other than weight loss).
The 100 billion CLP-1 drug market is currently constrained by downstream production capacity. Up to now, “weight loss needles” are still in short supply.
Currently, the most popular diet pills are GLP-1 drugs. The most popular ones in the market are simeglutide injections, and the most representative ones are the original pharmaceutical company Renault and Nord's weight loss needle Wegovy.
In 2023, Wegovy's global sales reached DKK 31.343 billion (US$4.54 billion).
For school bullies, the 100 points in the exam are because they only have 100 points on the paper. Novo Nordisk sells 4.5 billion US dollars a year because production at full capacity can only supply so many doses to the market.
Since May of last year, Novo Nordisk has limited the supply of low-dose diet pills in the US due to supply shortages.
Taken together, in the GLP-1 pharmaceutical industry chain, downstream formulation manufacturers will share the largest share of the value of the industrial chain, followed by midstream CDMOs and APIs.
In order to meet market demand and add maximum industrial chain value, Novo Nordisk built a new factory, made major acquisitions, and furiously expanded production.
It wasn't until the end of January 2024 that Novo Nordisk said that compared to previous months, the supply of low-dose Wegovy injections had more than doubled, which would meet the weight loss needs of more people.
However, there is still limited supply of Wegovy in 0.25ml, 0.5ml, 1ml, and 1.7 ml doses, according to data released Monday by the Food and Drug Administration (FDA) Drug Shortage Database.
To this end, Novo Nordisk recently announced that its controlling shareholder Novo Holdings will acquire pharmaceutical filling giant Catalent (the main supplier of Wegovy's filling work) at a price of 16.5 billion US dollars (including debt).
Judging from the data released by the FDA, in addition to Novo Nordisk's Wegovy, Eli Lilly's diabetes drug Mounjaro and diet drug Zepbound are also in short supply.
Eli Lilly is also speeding up production capacity expansion. 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 drugs by the end of 2023.
Eli Lilly executives said that production will be “urgently” expanded 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 intestinal insulin drugs (both of the above drugs are insulin-stimulating drugs) will increase at least 1.5 times compared to the second half of 2023.
Prior to that, Novo Nordisk and Eli Lilly had already invested billions of dollars to build new plants.
Novo Nordisk said at the end of last year that it will invest 6 billion US dollars to expand its production site in Denmark, and the construction period will last from the end of 2025 to 2029. In addition, it will also spend around $2.3 billion to build a new factory in France.
Eli Lilly's plant in Triangle Park, North Carolina began production last year. Meanwhile, a new plant in Concord, North Carolina, will begin production as early as the end of this year, and delivery will begin in 2025.
It is foreseeable that the global supply of CLP-1 drugs may continue to be in short supply for the next two years.
Domestic pharmaceutical companies' production capacity is also speeding up.
At the end of December 2023, the Suzhou Industrial Park Management Committee website published the “Environmental Impact Report of Borui Pharmaceutical (Suzhou) Co., Ltd. Chemical Formulation Renovation Project”. According to the “Report”, Borui Pharmaceutical plans to increase the production capacity of 350 million bottles/year of BGM0504 injections, with a total of 3 production lines for “sugar reduction and weight loss.”
Borui Pharmaceutical stated on the investor interactive platform that BGM0504 injection is a GLP-1 (glucagon-like peptide-1) and GIP (glucose-dependent insulin-promoting polypeptide) receptor dual agonist developed by the company. It can stimulate GIP and GLP-1 downstream pathways, produce biological effects such as blood sugar control, weight loss, and treatment of non-alcoholic steatohepatitis (NASH), showing potential for treating various metabolic diseases.
In terms of APIs, according to data from the Drug Evaluation Center of the State Drug Administration, a total of 4 domestic companies have obtained simeglutide API qualifications, including Pai Peptide Biotech, Jianxiang Biology, Nootai Biotech, and Tianji Biotech.
In addition, companies such as Prologue Pharmaceuticals, Puli Pharmaceuticals, Taienkang, Hanyu Pharmaceutical, Shengnuo Biotech, and Orient are also actively developing and applying for relevant qualifications.
Fourteen companies, including Hanyu Pharmaceutical and Gloria Ying, have registered in the US and have production capacity in the simeglutide API industry chain.