LONDON, Oct 9 (Reuters) – Contract drug producers searching for to faucet into the booming marketplace for weight-loss medicine are investing billions of {dollars} to develop or construct factories that fill the injection pens used to manage therapies like Novo Nordisk’s (NOVOb.CO) Wegovy.
Interviews with a dozen firm executives, analysts and buyers confirmed pharmaceutical providers firms jostling to safe extra of the specialist work of filling the syringes used within the pens, a course of generally known as fill-finish.
“Each contract producer that has sterile fill-finish capability needs so as to add extra, to get forward, as a result of it isn’t nearly Wegovy anymore,” mentioned Tejas Savant, senior healthcare fairness analyst at Morgan Stanley. “You even have Lilly’s Mounjaro coming, and others.”
Gross sales of Wegovy, the primary of a brand new era of weight problems therapies which mimic the physique’s appetite-suppressing hormones, have soared since its launch in america in June 2021.
Eli Lilly’s (LLY.N) Mounjaro is predicted to be authorised for weight-loss in america this 12 months.
The weekly weight-loss injections belong to a category of medication generally known as GLP-1 agonists, which analysts estimate might be value as a lot as $100 billion inside a decade, together with oral therapies now being developed by Pfizer (PFE.N) and others.
WuXi Biologics (2269.HK) CEO Chris Chen advised Reuters his firm is speaking to shoppers about utilizing pre-filled syringe capability it’s putting in at a German manufacturing unit it purchased in 2020.
Describing curiosity as “fairly excessive”, he mentioned he needs to purchase extra factories in Europe to serve GLP-1 prospects, however didn’t give particulars.
Catalent is constructing “important” pre-filled syringe capability at factories in Anagni, Italy and Bloomington, Indiana, in america, mentioned Cornell Stamoran, its vp of company technique and authorities affairs. They may come on-line in 2024.
The U.S. firm already does Wegovy fill-finish work.
The race for enterprise amongst contract growth and manufacturing organisations (CDMOs) started final 12 months. Since then, about half a dozen tasks value a minimum of $3 billion have been introduced by firms together with Lonza(LONN.S), Fujifilm Diosynth Biotechnologies, a subsidiary of Fujifilm Corp, and Germany’s Vetter.
And with Lilly getting ready to launch Mounjaro and Novo struggling to satisfy demand even because it rolls Wegovy out in additional markets, the tempo is accelerating.
One other Novo associate, Thermo Fisher (TMO.N) is changing services used to fill COVID-19 vaccine syringes to deal with pens for weight problems and diabetes medicines, CEO Marc Casper advised a Morgan Stanley well being convention final month.
He mentioned there was an enormous scarcity of capability. An organization spokesperson declined to remark.
All the businesses interviewed by Reuters declined to reveal phrases of potential contracts or prospects.
FROM COVID TO OBESITY
Huge drugmakers rent CDMOs after they lack in-house experience or scale. Filling syringes is completed in sterile circumstances to keep away from contamination earlier than pens are assembled and packaged, after which shipped by wholesalers to pharmacies and clinics.
Novo is spending billions to extend its personal Wegovy output and plans so as to add extra contract manufacturing websites along with three run by Catalent and Thermo.
Even so, shortages will final into subsequent 12 months.
Lilly can be rising inside capability, however for now could be utilizing an “in depth portfolio” of CDMOs, a spokesperson mentioned, with out naming them. Trials of its drug Mounjaro confirmed larger efficacy than Wegovy.
Analysis agency The Perception Companions predicts the fill-finish market will greater than double between 2019 and 2027, to $12.5 billion. That’s about twice the tempo for tablets or capsules, an business skilled mentioned.
New GLP-1 enterprise might greater than offset the lack of COVID-19 vaccine contracts, executives mentioned.
The U.S. Inflation Discount Act can be boosting growth of biologic medicine, a few of that are injected. Injectables are more and more utilized in aged care settings, and a few new Alzheimer’s and generic arthritis medicine are administered by injection.
However GLP-1s are the main purpose for investments, firms mentioned.
Many tasks will solely full subsequent 12 months or in some circumstances in 2026, that means provide constraints are prone to persist. One healthcare investor mentioned CDMOs’ capacity to spice up capability will decide how briskly the weight problems drug market grows.
Within the meantime, Catalent and Thermo are “within the catbird seat” main the market on account of their present capabilities, mentioned Barclays analyst Luke Sergott.
Catalent shares at present commerce at round 42 occasions anticipated earnings over the following 12 months, in accordance with LSEG knowledge – greater than 28 for Lonza and 21 for Thermo, reflecting its present dominance within the weight problems race regardless of some high quality points. Reuters reported in July that high quality lapses at Catalent’s Brussels manufacturing unit had brought about Wegovy shortages.
Executives mentioned the scramble for capability wouldn’t create a surplus.
“CDMOs do not comply with a ‘construct it and they’re going to come’ mannequin, primarily based on my 30 years within the business. That is not the way you construct a CDMO enterprise to final,” Catalent’s Stamoran mentioned.
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Reporting by Maggie Fick; Further reporting by Patrick Wingrove in New York; Enhancing by Josephine Mason and Catherine Evans
Our Requirements: The Thomson Reuters Belief Ideas.
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