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Released February 21, 2024 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The rocketing demand for weight loss drugs over the past couple of years has spurred a major spike in investment in manufacturing projects and takeovers, led by market-leader pharmaceutical company Novo Nordisk A/S (NYSE:NVO) (Bagsværd, Denmark).
According to Morgan Stanley, the market for weight-management medicines will swell from a US$2.4 billion sector in 2022 to a US$77 billion market by 2030. Obesity currently affects more than 1 billion people globally. "Social media activity documenting transformative weight loss, together with the establishment of affordable insurance coverage more quickly than anticipated, has helped drive demand for obesity medicines beyond our expectations," said Mark Purcell, Morgan Stanley European Biopharmaceuticals analyst . "While supply constraints have capped sales growth in the near term, the global obesity market could go from a $2.4 billion category in 2022 to reach $77 billion in 2030, up from our previous estimate for a $54 billion."
Today the market is dominated by Novo Nordisk with its Ozempic diabetes drug (also used for weight-loss) and its dedicated Saxenda and Wegovy weight loss drugs. But the company will be facing increased competition going forward, in particular from Eli Lilly (NYSE:LLY) (Indianapolis, Indiana) and it's new Zepbound weight loss drug, launched towards the end of last year. Zepbound clocked up more than US$175 million in sales in its first month and could be on track to top US$1 billion in sales for 2024. The company has also seen a spike in sales and prices for its Mounjara diabetes drug. Others companies with similar drugs at various stages in trials include Pfizer Incorporated (NYSE:PFE) (New York, New York) and Amgen Incorporated (NASDAQ:AMGN) (Thousand Oaks, California). Switzerland's Roche (Basel) is hoping to buy its way in with a US$2.7 billion deal in December to buy U.S. obesity drug developer Carmot Therapeutics (California).
Late last year, the U.K.'s largest drugmaker, AstraZeneca (Cambridge, U.K.), made its move into the sector by signing an exclusive development and licensing agreement with a Chinese company Eccogene (Shanghai) for an obesity and type-2 diabetes pill that is in early stage development. The experimental drug, named ECC5004, would also treat cardiometabolic conditions such as heart disease and stroke. At the time, Sharon Barr, executive vice president of BioPharmaceuticals R&D at AstraZeneca, said: "With the number of people living with cardiometabolic conditions and obesity today already over one billion, there is a need for continued innovation and next generation therapeutic options. Building on the promising Phase I clinical data generated by Eccogene, we believe this oral GLP-1RA molecule could offer alternatives to current injectable therapies both as a potential monotherapy as well as in combination for cardiometabolic diseases such as type-2 diabetes, as well as for obesity."
The downside of such rapid success for Novo has been an inability to keep up with demand. Novo and its main manufacturing partner, Catalent Incorpoarted (NYSE:CTLT) (Somerset, New Jersey), suffered a number of manufacturing setbacks in 2022 following inspections at some of the key plants in Europe and the U.S.. Although the company has since managed to fulfill orders, it has embarked on an aggressive investment strategy to cope with future demand--including the recent purchase of Catalent's three key manufacturing plants in Brussels (Belgium), Anagni (Italy) and Bloomington (Indiana). For additional information, see February 15, 2024, article - Novo Nordisk Spends $11 Billion to Make More Weight Loss Drugs.
The company's Chief Executive Officer Lars Fruergaard Jørgensen was surprised at how fast demand surged for its Wegovy product and even more so that people were willing to buy it off-prescription--which is typically very expensive. Speaking to the Financial Times, he said: "The uptake we see has surprised us initially. We wondered, was that only a U.S. phenomenon? We tested it out in Denmark and Norway, we saw more or less the same. It's perhaps the first time that you see a large population willing to pay out of pocket for medicine." Wegovy, which started its meteoric rise in the U.S., is still only licensed for sale in a number of European countries so far, such as Germany, Denmark, Norway and Switzerland. Unlike in the U.S,. it is not supported by the public health system, nor most health insurers, so about 80% of the sales are paid for by consumers out-of-pocket. "When there's finally something that works and brings improved health and quality of life for the individual, there's a very high willingness to pay," Jørgensen said.
In November, the company announced plans to invest US$6 billion to expand its Denmark-based manufacturing operation at Kalundborg. A new active pharmaceutical ingredients (API) manufacturing facility will be built on a 170,000-square-meter area located within the existing site and will focus mainly on boosting output for its diabetes and obesity products. It will comprise the development of an API recovery factory, an API purification factory and a finished products assembly pack. Elsewhere, the company announced a US$2.3 billion investment in its French manufacturing operation at Chartres, which employs 1,600 people. It will add aseptic production and finished production processes, as well as an extension of the site's current laboratory for quality control--effectively doubling the plant's footprint and adding 500 more staff. The investment includes capacity for glucagon-like peptide-1 (GLP-1) products. Construction projects for the expansion are underway and will gradually be finalized between 2026 and 2028. More than 500 new jobs are expected to be created to handle production activities which will run 24/7 upon completion.
Novo also sees Ireland as a prime location for boosting its manufacturing capacity. In December the company made a deal with Dublin-based Alkermes plc to buy its manufacturing facility in Athlone, in the center of Ireland. A one-time cash payment of US$92.5 million sealed the deal, and more than 400 staff will transfer to Novo Nordisk on completion of the deal in mid-2024. At the time, a spokesperson for the company said: "The acquisition of the Athlone facility represents an expansion of Novo Nordisk's global manufacturing setup and will provide Novo Nordisk with additional development and manufacturing capacity for current and future oral products."
Last month, Industrial Info reported that Novo has plans to build a major manufacturing operation at its Grange Castle campus in Dublin, Ireland--again to keep up with demand for Wegovy and Ozempic. Media reports indicate that the company is looking to invest more than US$2 billion to construct up to 1.6 million square feet of new facilities and employ up to 1,100 people. It would comprise up to three filling and packaging manufacturing facilities, a warehouse building, two assembly and packaging facilities, an administration building, and a laboratory. Assuming it receives planning permission, the plant is expected to be operational by 2026. For additional information, see January 22, 2024, article - Novo Nordisk Taps Ireland for Weight Loss Production Boost.
Rival Eli Lilly is also investing in boosting production capacity for its own diabetes offerings Mounjaro and Trulicity. Mounjaro has been cleared for weight-loss use in the U.S. and is expected to be cleared for the same purpose in the European Union this year. At the end of last year, Lilly revealed a US$2.5 plan to build a production site in Alzey, in western Germany, to "support an increased demand for Lilly's medicines, including its diabetes and obesity portfolio." With the planned manufacturing facility in Alzey, Lilly will operate six manufacturing sites in Europe, including one in nearby Fegersheim, France.
"Supply shortages may have put a limit on near-term growth, but the industry's pipeline has rapidly expanded to unlock new treatment options," Purcell said. "This includes long-acting oral medicines in place of weekly injections, as well as combination therapies to bolster effectiveness. These innovations should help both broaden the appeal and improve access for these drugs in the U.S. and beyond."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
According to Morgan Stanley, the market for weight-management medicines will swell from a US$2.4 billion sector in 2022 to a US$77 billion market by 2030. Obesity currently affects more than 1 billion people globally. "Social media activity documenting transformative weight loss, together with the establishment of affordable insurance coverage more quickly than anticipated, has helped drive demand for obesity medicines beyond our expectations," said Mark Purcell, Morgan Stanley European Biopharmaceuticals analyst . "While supply constraints have capped sales growth in the near term, the global obesity market could go from a $2.4 billion category in 2022 to reach $77 billion in 2030, up from our previous estimate for a $54 billion."
Today the market is dominated by Novo Nordisk with its Ozempic diabetes drug (also used for weight-loss) and its dedicated Saxenda and Wegovy weight loss drugs. But the company will be facing increased competition going forward, in particular from Eli Lilly (NYSE:LLY) (Indianapolis, Indiana) and it's new Zepbound weight loss drug, launched towards the end of last year. Zepbound clocked up more than US$175 million in sales in its first month and could be on track to top US$1 billion in sales for 2024. The company has also seen a spike in sales and prices for its Mounjara diabetes drug. Others companies with similar drugs at various stages in trials include Pfizer Incorporated (NYSE:PFE) (New York, New York) and Amgen Incorporated (NASDAQ:AMGN) (Thousand Oaks, California). Switzerland's Roche (Basel) is hoping to buy its way in with a US$2.7 billion deal in December to buy U.S. obesity drug developer Carmot Therapeutics (California).
Late last year, the U.K.'s largest drugmaker, AstraZeneca (Cambridge, U.K.), made its move into the sector by signing an exclusive development and licensing agreement with a Chinese company Eccogene (Shanghai) for an obesity and type-2 diabetes pill that is in early stage development. The experimental drug, named ECC5004, would also treat cardiometabolic conditions such as heart disease and stroke. At the time, Sharon Barr, executive vice president of BioPharmaceuticals R&D at AstraZeneca, said: "With the number of people living with cardiometabolic conditions and obesity today already over one billion, there is a need for continued innovation and next generation therapeutic options. Building on the promising Phase I clinical data generated by Eccogene, we believe this oral GLP-1RA molecule could offer alternatives to current injectable therapies both as a potential monotherapy as well as in combination for cardiometabolic diseases such as type-2 diabetes, as well as for obesity."
The downside of such rapid success for Novo has been an inability to keep up with demand. Novo and its main manufacturing partner, Catalent Incorpoarted (NYSE:CTLT) (Somerset, New Jersey), suffered a number of manufacturing setbacks in 2022 following inspections at some of the key plants in Europe and the U.S.. Although the company has since managed to fulfill orders, it has embarked on an aggressive investment strategy to cope with future demand--including the recent purchase of Catalent's three key manufacturing plants in Brussels (Belgium), Anagni (Italy) and Bloomington (Indiana). For additional information, see February 15, 2024, article - Novo Nordisk Spends $11 Billion to Make More Weight Loss Drugs.
The company's Chief Executive Officer Lars Fruergaard Jørgensen was surprised at how fast demand surged for its Wegovy product and even more so that people were willing to buy it off-prescription--which is typically very expensive. Speaking to the Financial Times, he said: "The uptake we see has surprised us initially. We wondered, was that only a U.S. phenomenon? We tested it out in Denmark and Norway, we saw more or less the same. It's perhaps the first time that you see a large population willing to pay out of pocket for medicine." Wegovy, which started its meteoric rise in the U.S., is still only licensed for sale in a number of European countries so far, such as Germany, Denmark, Norway and Switzerland. Unlike in the U.S,. it is not supported by the public health system, nor most health insurers, so about 80% of the sales are paid for by consumers out-of-pocket. "When there's finally something that works and brings improved health and quality of life for the individual, there's a very high willingness to pay," Jørgensen said.
In November, the company announced plans to invest US$6 billion to expand its Denmark-based manufacturing operation at Kalundborg. A new active pharmaceutical ingredients (API) manufacturing facility will be built on a 170,000-square-meter area located within the existing site and will focus mainly on boosting output for its diabetes and obesity products. It will comprise the development of an API recovery factory, an API purification factory and a finished products assembly pack. Elsewhere, the company announced a US$2.3 billion investment in its French manufacturing operation at Chartres, which employs 1,600 people. It will add aseptic production and finished production processes, as well as an extension of the site's current laboratory for quality control--effectively doubling the plant's footprint and adding 500 more staff. The investment includes capacity for glucagon-like peptide-1 (GLP-1) products. Construction projects for the expansion are underway and will gradually be finalized between 2026 and 2028. More than 500 new jobs are expected to be created to handle production activities which will run 24/7 upon completion.
Novo also sees Ireland as a prime location for boosting its manufacturing capacity. In December the company made a deal with Dublin-based Alkermes plc to buy its manufacturing facility in Athlone, in the center of Ireland. A one-time cash payment of US$92.5 million sealed the deal, and more than 400 staff will transfer to Novo Nordisk on completion of the deal in mid-2024. At the time, a spokesperson for the company said: "The acquisition of the Athlone facility represents an expansion of Novo Nordisk's global manufacturing setup and will provide Novo Nordisk with additional development and manufacturing capacity for current and future oral products."
Last month, Industrial Info reported that Novo has plans to build a major manufacturing operation at its Grange Castle campus in Dublin, Ireland--again to keep up with demand for Wegovy and Ozempic. Media reports indicate that the company is looking to invest more than US$2 billion to construct up to 1.6 million square feet of new facilities and employ up to 1,100 people. It would comprise up to three filling and packaging manufacturing facilities, a warehouse building, two assembly and packaging facilities, an administration building, and a laboratory. Assuming it receives planning permission, the plant is expected to be operational by 2026. For additional information, see January 22, 2024, article - Novo Nordisk Taps Ireland for Weight Loss Production Boost.
Rival Eli Lilly is also investing in boosting production capacity for its own diabetes offerings Mounjaro and Trulicity. Mounjaro has been cleared for weight-loss use in the U.S. and is expected to be cleared for the same purpose in the European Union this year. At the end of last year, Lilly revealed a US$2.5 plan to build a production site in Alzey, in western Germany, to "support an increased demand for Lilly's medicines, including its diabetes and obesity portfolio." With the planned manufacturing facility in Alzey, Lilly will operate six manufacturing sites in Europe, including one in nearby Fegersheim, France.
"Supply shortages may have put a limit on near-term growth, but the industry's pipeline has rapidly expanded to unlock new treatment options," Purcell said. "This includes long-acting oral medicines in place of weekly injections, as well as combination therapies to bolster effectiveness. These innovations should help both broaden the appeal and improve access for these drugs in the U.S. and beyond."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
