Novo Nordisk, Eli Lilly Stride To Boost Supply Shortage For Newly Found Holy Grail Of Miraculous Weight Loss Drugs

The unprecedented demand for weight loss drugs, including Novo Nordisk A/S’s NVO Wegovy and Eli Lilly And Co’s LLY Zepbound, has created a supply crunch, leaving patients struggling to access these injectable treatments. 

With obesity medications expected to reach 15 million U.S. adults by 2030, the weight loss drug market could potentially be valued at $100 billion by the end of the decade.

Novo Nordisk and Eli Lilly are actively working to increase supply to meet the demand spikes. Both companies have recently provided updates on their positive supply developments, assuring investors and patients.

Novo Nordisk revealed significant progress in increasing the supply of its lower-dose versions of Wegovy in January, doubling the availability compared to previous months. 

“I think it’s going to take a few years for it to resolve itself,” Cantor Fitzgerald analyst Louise Chen told CNBC of the supply issues. “But I think both companies will slowly start to meet the demand in the market.” 

Last week, Novo Nordisk agreed to acquire three fill-finish sites from Novo Holdings, its largest shareholder, in connection with a transaction where Novo Holdings agreed to acquire Catalent Inc CTLT. Novo Nordisk will acquire the three manufacturing sites for an upfront payment of $11 billion. 

The three manufacturing sites specialize in the sterile filling of drugs and are located in Anagni (Italy), Brussels (Belgium), and Bloomington (Indiana, US). 

Eli Lilly, facing challenges with the limited availability of certain doses of its diabetes drug Mounjaro, has doubled its production capacity for incretin drugs. 

The company plans to expand production further in the second half of the year, ensuring at least a 1.5-fold increase compared to the second half of 2023.

Limited quantities of Eli Lilly’s diabetes drug Mounjaro (tirzepatide) in higher doses (10 mg, 12.5 mg, and 15 mg) will be accessible until early March 2024, per the FDA’s website. 

In November, Eli Lilly said it intends to construct a production plant in western Germany with an estimated investment of €2 billion.

Novo Nordisk and Eli Lilly are exploring alternative forms of weight loss drugs to alleviate supply constraints. 

Eli Lilly, in particular, aims to launch Mounjaro in a delivery device called KwikPen outside the U.S., leveraging existing manufacturing resources to meet demand. 

Additionally, the development of oral drugs may provide a more accessible and cost-effective solution to meet the soaring market demand.

Price Action: LLY shares are up 0.01% at $740.20, NVO shares are down 0.79% at $120.24 during the premarket session on the last check Monday.

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