Eli Lilly races to boost capacity as it rolls out rival to Novo Nordisk weight-loss drug
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Eli Lilly is racing to secure the services of outsourcers to boost production of its obesity drug Zepbound, as the US pharmaceutical group rolls out its rival to Danish group Novo Nordisk’s blockbuster appetite suppressant Wegovy.
The Indianapolis-based company has struck agreements with US government-backed manufacturer National Resilience and Italian producer BSP Pharmaceuticals for the filling and “finishing” of its injector pens, according to people briefed on the arrangements.
Huge demand for GLP-1s, the lucrative new class of diabetes and weight-loss drugs that include Wegovy and Zepbound, is testing the capacity of plants capable of the formulation of pharmaceutical solutions, filtering them into syringes and sealing and packaging the product, part of a process known as fill-finish.
“There was a lot of investment in high-speed, large-capacity fill lines during Covid and there were questions about how that capacity is going to be used going forward, and then the GLP-1s came along and now the problem is almost the opposite,” said Jim Miller, a consultant who advises drugmakers on manufacturing strategy.
Zepbound, whose active ingredient tirzepatide is also used in Lilly’s diabetes treatment Mounjaro, became the first drug that can compete head-to-head with Wegovy when it was approved for weight-loss use in the US in November.
Wegovy, alongside Eli Lilly’s tirzepatide-based drugs, which are both administered via weekly injections, are expected to generate $18.2bn in global sales this year, according to projections by research group GlobalData.
The rush to secure manufacturing capacity comes as Wegovy and Mounjaro, which is also commonly prescribed off-label for weight loss, are in short supply, according to the US Food and Drug Administration.
BSP and National Resilience are among a group of highly specialised contract manufacturers benefiting from the boom in obesity drugs.
The global contract development and manufacturing market, which supports pharma companies in making products and running clinical trials, is projected to grow from $72bn to $90bn over the next two years, according to figures published by contract manufacturer Catalent.
Novo Nordisk last month paid $11bn to buy three “fill-finish” plants for use in manufacturing Wegovy and its diabetes treatment Ozempic from Catalent as part of a deal in which the Danish group’s parent company acquired the US-headquartered outsourcer for $16.5bn.
“The sheer magnitude of investment clearly demonstrates the acute need to boost fill-finish capacity,” said Peter Welford, an analyst at Jefferies.
However, the plants will not enable Novo Nordisk to ramp up production until 2026. Prior to the acquisitions last month, Novo Nordisk CEO Lars Fruergaard Jørgensen warned: “there’ll be a demand that outgrows what can be produced by us, and probably also competition”.
Eli Lilly and Novo Nordisk have poured billions of dollars into expanding in-house production facilities to address their two chief bottlenecks: the production of active ingredients, and fill-finish.
The Danish group revealed plans in November to spend $6bn expanding the 1.2mn square metre production site in Denmark where it makes semaglutide, the active ingredient in both Wegovy and Ozempic. Its US rival has announced investments of $5.5bn to expand manufacturing capacity across four sites globally.
While production of both semaglutide and tirzepatide involves a complex fermentation process, Eli Lilly’s drug is even harder to manufacture as it contains two unnatural amino acids, according to experts.
With new production facilities typically taking several years to come online, companies are leaning heavily on contract manufacturers.
GLP-1s accounted for more than half of auto-injector pens produced by one unnamed contract manufacturer cited by Evercore analysts.
US-based Thermo Fisher, Catalent and Simtra, as well as Germany-based Vetter, control more than half of the injectable fill-finish outsourcing market, according to internal estimates from one contract manufacturer seen by the Financial Times.
Peter Soelkner, managing director of Vetter, which has the capacity to produce at least 210mn injectable doses a year, said contract manufacturers were “witnessing increased demand in specific therapeutic areas such as GLP-1s”.
National Resilience, a contract manufacturer that sprang up during the pandemic as part of US efforts to bring production capacity onshore and which last year received a $410mn loan from the US defence department, will fill Zepbound injector pens at its Cincinnati plant, which will have a total capacity of 200mn doses a year by 2025.
BSP, a family-owned business that specialises in fill-finish for injectable cancer drugs, began setting up the equipment required to manufacture tirzepatide in the second half of last year. By the end of next year, its facility in the city of Latina near Rome will be able to produce 61mn injectable doses of non-cancer drugs. BSP previously produced Covid antibody treatment bamlanivimab for Eli Lilly.
Eli Lilly said it made use of “an extensive portfolio of external contract manufacturers to accelerate production” but declined to disclose further details. BSP and National Resilience declined to comment.
Bottlenecks are common in the fill-finish stage of drugmaking because most manufacturers run their production lines “close to full capacity”, said Gil Roth, president of the Pharma & Biopharma Outsourcing Association global industry body, whose members include Catalent and Thermo Fisher. Every single dose needs to be inspected before a batch can be shipped, either by eye or increasingly by machine.
Six contract manufacturers have so far this year announced plans to expand injectable fill-finish capacity, moves that Roth said were partly driven by the “huge market opportunity” from GLP-1s and other injectable drugs.
“With the GLP-1s, there’s expansion but the bottlenecks again are getting hold of highly specialised equipment and having the workforce in place to handle these products,” he added.
However, Naresh Chouhan, an analyst at Intron Healthcare who covers the global contract drug manufacturer market, said he did not expect smaller outsourcers could “move the needle” for Eli Lilly or Novo Nordisk.
“These are big, highly regulated, expensive facilities to manufacture and construct,” he added. “It’s unlikely we have high amounts of spare capacity [in the market].”
Novo Nordisk, Eli Lilly, and Pfizer all have weight-loss pills under development, which could solve the fill-finish supply issues. But an oral pill may create its own supply problems, with a 50mg daily dose of Novo Nordisk’s semaglutide requiring 146 times as much active ingredient as a weekly injection, according to Barclays analysts.
Supply constraints would not be solved soon, warned Miller.
“It’s not like Lilly and Novo will never be able to fulfil demand,” he said. “It’s just that it can take three to five years to get a facility standing and running.”
The Wegovy and Zepbound chart has been amended since original publication to show that sales for Eli Lilly’s Zepbound included Mounjaro figures
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