Biotech

Lilly plans new $2.5B manufacturing plant as obesity drug demand ramps up

Dive Brief:

  • Eli Lilly is spending $2.5 billion to build a new manufacturing plant to expand capacity for injectable drugs and devices, including its weight-loss treatment Zepbound and diabetes shot Mounjaro, as demand for metabolic medicines from the GLP-1 class continues to outstrip supply.
  • Construction on the site in Rhineland-Palatinate, Germany, will begin in 2024, and will employ 1,900 people in the building phase. When it is operational in 2027, the factory will employ 1,000 people in positions for engineers, operators and scientists, according to the company.
  • Lilly and rival Novo Nordisk have struggled to keep up with demand for new obesity and diabetes therapies, with the latter limiting access to starter doses of its weight-loss drug Wegovy. Lilly CEO David Ricks described his company’s approach to the shortages as “all hands on deck” ahead of the Food and Drug Administration approval of Zepbound earlier this month.

Dive Insight:

Ricks foreshadowed the announcement of the new German plant during Lilly’s conference call discussing third quarter earnings on Nov. 2.

“You’re noting kind of new greenfield site expansions, [which] we’ve rightfully made a big deal out of,” Ricks said in response to an analyst question about building new capacity. “We’re not done with those. I think you might hear more about that in the future.”

The new German plant follows announcements of a site expansion in North Carolina and two new factories in Indiana, and will be the sixth Lilly manufacturing site in Europe.

Industry analysts and executives are penciling in massive sales forecasts for GLP-1 drugs based on their use as treatments to lower blood sugar in people with diabetes as well as stimulate weight loss in people classed as overweight or obese. Pfizer CEO Albert Bourla estimated a market as big as $90 billion by early in the 2030s, while analysts from the investment banking firm Raymond James put it at around $80 billion to $90 billion by the end of the decade.

More of these drugs could be coming, too, as analysts from ISI Evercore have identified 54 clinical-stage programs in obesity. Half of them with disclosed mechanisms of action rely on GLP-1 activation.

Insurers so far have limited access to these drugs in weight management. However, that could change in the near future as Novo has been able to demonstrate that weight loss through use of Wegovy leads to a reduction in cardiovascular complications in overweight and obese people with heart disease.

This post has been syndicated from a third-party source. View the original article here.

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