Efforts by Novo Nordisk and Eli Lilly to make weight loss drugs more accessible are ongoing.

• The high demand for weight loss drugs is exceeding the available supply, causing difficulties for patients seeking injectable treatments.
• Novo Nordisk and Eli Lilly are making progress in increasing their supply of dominant weight loss drugs.
• Both pharmaceutical companies have recently provided optimistic stock updates, aiming to alleviate investors' concerns about the profitability of their medications and to assure patients that they will have access to them.

The high demand for weight loss drugs is overwhelming the supply, making it difficult for patients to access injectable treatments.

The dominant weight loss drugmakers, and , have stated that supply issues are unlikely to resolve soon, as the demand for these medications continues to rise. However, both companies are making progress in their efforts to increase production.

According to Cantor Fitzgerald analyst Louise Chen, it may take several years for the supply issues to be resolved. However, she believes that both companies will gradually meet the market demand over time.

Despite the high cost, mixed insurance coverage, and potential side effects, weight loss drugs such as Wegovy and Zepbound have attracted a large number of patients due to their ability to help individuals lose substantial amounts of weight over time.

By 2030, it is predicted that 15 million U.S. adults will be taking obesity medications, according to Goldman Sachs analysts. The weight loss drug market is projected to be worth $100 billion by the end of the decade, as some Wall Street analysts have stated.

Although demand has increased, limited data is available on the extent of drug shortages or the supply companies' response.

Dr. Jeff Friedman, the director of bariatric surgery at the University of Florida, who also prescribes obesity medications, stated that he frequently hears about patients going to pharmacies that do not have the medication in stock for them, particularly during the summer months.

Eli Lilly and Novo Nordisk provided updates on positive supply developments to investors last week, and they ended 2023 with new investments in expanding production capacity for their weight loss and diabetes drugs.

Novo Nordisk and Eli Lilly aim to maintain their market edge by reassuring anxious investors and patients that they can capitalize on the success of their treatments, while other companies such as , , , , and smaller obesity drugmakers race to join the space.

Drugmakers kick off 2024 with supply progress

Novo Nordisk has recently doubled its supply of lower-dose versions of Wegovy in January compared to previous months, allowing more individuals to begin taking the drug. Since May, the company has restricted the availability of those lower "starter" doses in the U.S. due to shortages.

The Food and Drug Administration's drug shortage database reports that there is still limited availability of 0.25, 0.5, 1, and 1.7-milligram doses of Wegovy. Patients usually begin with the 0.25-milligram dose and gradually increase the size to alleviate side effects such as nausea.

Wegovy supply will be gradually increased by Novo Nordisk, as executives announced on the company's fourth-quarter earnings call last week.

The FDA has limited availability for certain doses of Eli Lilly's diabetes drug Mounjaro, which contains the same active ingredient as Zepbound. Both treatments are incretin drugs that mimic gut hormones to suppress appetite and regulate blood sugar.

Eli Lilly will expand production of incretin drugs with equal urgency this year, with the most significant production increases occurring in the second half of the year, executives said during the company’s fourth-quarter earnings call Tuesday. Despite achieving its goal of doubling production capacity by the end of 2023, the company will continue to prioritize production expansion in the coming months.

Executives stated that by the end of the year, the company anticipates its production of sellable incretin drug doses to be at least 1.5 times greater than it was during the second half of 2023.

Catalent deal could boost Wegovy supply

Novo Holdings, the parent company of Novo Nordisk, announced multibillion-dollar deals that could increase Wegovy supply, but not immediately.

On Monday, Novo Holdings announced that it will acquire drug manufacturer Catalent in a $16.5 billion deal. Catalent is the primary supplier of fill-finish work, which involves filling and packaging syringes and injection pens, for Wegovy.

Novo Nordisk will acquire three manufacturing sites from Novo Holdings for $11 billion, gradually increasing the company's manufacturing capacity starting in 2026.

Michael Nedelcovych, a TD Cowen analyst, wrote in a note on Tuesday that Catalent deals are likely to "accelerate production more quickly" than constructing new plants or adding additional production lines to existing sites, which are "more costly and time-consuming" than acquisitions.

Eli Lilly CFO Anat Ashkenazi expressed concerns about Novo Holdings' acquisition during an earnings call on Tuesday, particularly because Eli Lilly contracts Catalent to manufacture some of its medications.

According to Eli Lilly, the acquisition of Catalent may not have a significant impact on its business since Catalent does not have any meaningful production, as stated by Cantor Fitzgerald's Chen.

New plants could increase long-term supply

Both Novo Nordisk and Eli Lilly have invested billions in constructing new manufacturing facilities to increase the availability of their weight loss and diabetes medications in the near future.

Eli Lilly announced that a new plant in Concord, North Carolina, will begin producing incretin drugs by the end of the year, with products available for shipping in 2025.

Morgan Stanley analysts predict that the facilities in New Jersey and North Carolina will significantly increase the company's capacity to supply autoinjector forms of Mounjaro, Zepbound, and Trulicity, which are the traditional delivery devices of those medicines.

Eli Lilly announced in November that it would invest $2.5 billion to establish a manufacturing facility for injectable products in Germany, with construction set to commence this year. Additionally, the company plans to construct other facilities in the coming years.

In addition to investing over $3 billion in constructing two new production facilities in Indiana, the pharmaceutical company has also allocated funds for this purpose.

In November, Novo Nordisk announced plans to invest $6 billion in expanding its manufacturing sites in Denmark and building a new production facility in France. The company expects to complete construction on the Danish expansion from 2025 to 2029, while the French facility will cost approximately $2.3 billion to build.

Other forms of weight loss drugs could help

In the future, alternative forms of weight loss drugs could ease supply shortages.

Eli Lilly has limited capacity to produce autoinjectors for Mounjaro and Zepbound, so the company plans to launch Mounjaro in a delivery device called KwikPen in certain countries outside of the U.S. The method requires additional regulatory approvals. The UK recently approved Mounjaro in KwikPen form.

Eli Lilly plans to launch KwikPen forms of its incretin drugs to increase supply, leveraging its existing manufacturing resources for insulin.

Autoinjector users require four different pens monthly, while KwikPen offers a four-dose pen that covers a month's treatment.

In a note last month, Wells Fargo analyst Mohit Bansal stated that if Eli Lilly introduces its diabetes and weight loss medications in KwikPen form in the U.S., it could result in a positive impact on the market for 2025.

Both Eli Lilly and analysts predict that oral forms of weight loss and diabetes drugs, which are simpler and less expensive to produce, will be crucial in fulfilling demand.

Eli Lilly is working on an oral medication called orforglipron, which could potentially outperform experimental weight loss drugs from Novo Nordisk and other companies.

In a midstage trial, Eli Lilly's pill helped overweight or obese patients lose up to 14.7% of their body weight after 36 weeks, which is consistent with the weight reduction caused by Novo Nordisk's oral drug over a shorter trial period.

Eli Lilly may not release late-stage trial data on the pill until 2025, meaning it won't enter the market anytime soon.