Ever since the weight loss drug craze created near-unprecedented demand, the first two companies to market have been doing everything they can to meet it by investing in old facilities, building new ones and even rationing doses.
It hasn’t been enough. And that’s where their rivals may find an opening.
Eli Lilly and Novo Nordisk — whose GLP-1 drugs last year sold $10.4 billion and $6.85 billion, respectively — have about three years left before their next competitor likely comes to market, biomanufacturing consultant Jim Miller told Endpoints News.
To make sure they stay ahead, Lilly and Novo have been pouring resources into manufacturing, a side of pharma operations that attracts relatively less attention than high-ambition R&D projects but that’s likely to determine who wins the battle over one of the industry’s most lucrative recent products.
In June, Lilly CEO Dave Ricks said on a Wall Street Journal podcast that it needs at least 10 to 15 dedicated sites to even come close to meeting tirzepatide demand. And both companies have made a start, with Novo earmarking $6.5 billion to invest in production this year, while Lilly has already spent at least $5.3 billion to extend its manufacturing footprint. Novo is undergoing at least eight global expansions, while Lilly is building six new facilities.
These companies are also buying up existing facilities. Lilly hopes to start manufacturing in the next six months at a site it acquired from Nexus Pharma back in April.
“Given the crunch that is happening right now, you want to move pretty quickly, and acquire capacity to the extent you can meet some of your demand,” William Blair analyst Pat Hickey said.
But with a site that fits GLP-1 manufacturing needs, companies have to pay premium prices, Hickey added. Earlier this year, Novo agreed to spend $11 billion to buy three fill-finish sites for its GLP-1 products from manufacturing partner Catalent.
While Lilly and Novo have the market to themselves for now, their competitors are making their own plans. Boehringer Ingelheim and Zealand Pharma are closest to market with their Phase 3 drug survodutide, while Roche and Amgen are in Phase 2.
“I don't think we're intimidated about the challenge on the manufacturing or the process development front,” Amgen’s CEO Robert Bradway said during its first-quarter earnings call. As for Roche, it will use its existing manufacturing network when it launches as it has “substantial experience” in making peptides, Manu Chakravarthy, global head of cardiovascular renal and metabolism product development, told Endpoints in an email.
Both Boehringer and Roche also told Endpoints they are open to using third-party manufacturers. Pfizer, which has a drug in early development, declined to comment.
Smaller companies aren’t considering commercial manufacturing but are planning to work with partners.
Zealand, for example, is openly looking for a large pharma development and commercial partner for its Phase 2 amylin drug petrelintide, CEO Adam Steensberg previously told Endpoints.
Viking also is “open to engaging” with other companies that can advance its GLP-1 assets, a spokesperson said. Investors have pegged Viking as an attractive acquisition target for large pharma companies looking to add a GLP-1 asset to their pipeline.
“It's so rare that a small company can survive going through that huge watershed event of owning an important drug and bringing it to the market,” said Howard University pharmaceutical and chemistry science professor Joseph Fortunak, who has worked in drug production and manufacturing for two decades.
The outsourcing option
The European Medicines Agency has said the GLP-1 drug shortage is unlikely to ease this year. With half of the world's population estimated to be obese by 2030, the GLP-1 market is predicted to be worth $130 billion at the end of the decade.
One option that drugmakers often use is outsourcing to a contract manufacturer. But there are tradeoffs. In 2021, Catalent had to halt production at a site making Novo’s Wegovy. The manufacturer was handed at least 12 FDA Form 483s over issues in manufacturing as well as using inappropriately designed equipment.
Outsourcing partnerships are critical as ongoing internal builds will not meet present demand. Facilities built from scratch typically take around three to four years to get up and running, Miller said. Despite preferring its own facilities, Lilly has turned to third-party manufacturers, and Novo is open to working with fill-finish partners despite keeping API production in house.
But even outsourcing partners are facing the capacity crunch. Injectable pens are in a “pretty serious” shortage, which is likely to stay for the next couple of years, Hickey said. Ypsomed — one of Novo’s injectable partners — is having to “substantially” ramp up its capacity until 2031. CordenPharma said last week it is pouring millions into expanding its manufacturing footprint to meet GLP-1 demand.
With ongoing GLP-1 shortages, it's clear that current manufacturing capacity isn't enough. Certain doses of Novo’s Ozempic are still in shortage in Europe, as are doses of Wegovy, which is in limited supply in the US. Doses of Lilly’s Zepbound, Mounjaro and Trulicity are also in shortage in the US.
Lilly and Novo already have massive manufacturing footprints. Although both companies declined to detail which sites make specific GLP-1 assets, Lilly said it operates from 19 facilities, while Novo has 16, five of which are used for API production.
Relying on internal manufacturing footprint is highly unusual for pharma companies, as is the case with GLP-1s. “It's kind of an anomaly that we've seen where they want to control more internally than outsource,” Hickey said.