The Zhitong Finance App learned that contract drug manufacturers seeking to enter the booming diet medicine market are investing billions of dollars to expand or build factories for therapeutic drugs like Wegovy by Novo Nordisk (NVO.US)pen-type syringeFill the medicine.
Interviews with more than a dozen company executives, analysts, and investors showed that pharmaceutical service companies are scrambling for more professional work, such as filling pen syringes. This process is known as fill-finish (fill-finish).
The market prospects are broad
Tejas Savant, senior healthcare analyst at Morgan Stanley, said, “Every contract manufacturer with aseptic completion capacity wants to increase production capacity to get ahead, because this is no longer just a Wegovy issue.” ”LillyThe diet drug Mounjaro is also about to be marketed, and there are other (products).”
Since it was launched in the US in June 2021, sales of Wegovy have soared. It is the first of a new generation of obesity treatment drugs. It mimics the body's appetite-suppressing hormone.
Eli Lilly's Mounjaro is expected to be approved for weight loss in the US this year.
Weekly diet injections fall into a class of drugs known as GLP-1 agonists. Analysts estimate that within ten years, including oral treatments being developed by Pfizer and other companies, the market for this drug could reach 100 billion US dollars.
Many companies are scrambling to enter the market
Chris Chen, CEO of Pharmacom Biologics, told the media that his company is discussing with customers the use of pre-filled syringe capacity installed in a German factory purchased by the company in 2020.
He said that interest is “quite high” and that he hopes to buy more factories in Europe to serve GLP-1 customers, but did not disclose details.
Cornell Stamoran, vice president of corporate strategy and government affairs at Catalent, said the company is building “significant” prefilled syringe production capacity at plants in Anagni, Italy, and Bloomington, Indiana, USA. They will go live in 2024.
The American company is already working on Wegovy refinish.
Business competition between contract development and manufacturing organizations (CDMOs) began last year. Since then, companies such as Lonza, Fujifilm's Fuji Diosynth Biotech, and Germany's Vetter have announced about six projects worth at least $3 billion.
As Eli Lilly prepares to launch Mounjaro,Novo NordiskWhile launching Wegovy in more markets, it is also trying to meet demand, and the pace is accelerating.
Novo NordiskMarc Casper, CEO of another partner of Thermo Fisher, said at a health conference in Morgan Stanley last month that the company is transforming the facility used to fill COVID-19 vaccine syringes into pens used to handle obesity and diabetes medications. He said there was a serious shortage of production capacity.
From COVID-19 vaccines to diet pills
Large pharma companies hire without internal expertise or scaleCDMO. inpen-type syringeBefore assembly and packaging, syringes need to be filled under sterile conditions to avoid contamination, then shipped by wholesalers to pharmacies and clinics.
Novo NordiskIt is spending billions of dollars to increase its Wegovy production and plans to add more contract manufacturing sites in addition to the three plants operated by Catalent and Thermo.
Even so,Wegovy'sThe shortage will continue until next year.
Eli Lilly is also increasing internal production capacity, but a spokesperson said it is currently using a “broad portfolio” ofCDMOHowever, it was not revealed exactly which product it is. Trials of its drug Mounjaro have shown higher efficacy than Wegovy.
Research company The Insight Partners predicts that from 2019 to 2027,Potting (fill-finish)The market will more than double to $12.5 billion. An industry expert says that's about twice as much as a tablet or capsule.
CDMO companies'Executives say the new GLP-1 business could make up for the loss of COVID-19 vaccine contracts.
The US Inflation Control Act is also promoting the development of biopharmaceuticals, some of which are injectable drugs. Injectables are increasingly used in elderly care settings, and some of the new Alzheimer's and common arthritis medications are administered by injection.
However, various companies said,GLP-1It's the main reason to invest.
Many projects won't be completed next year, and some won't be completed until 2026, which means supply constraints are likely to continue. A healthcare investor said,CDMOThe ability to increase production capacity will determine the growth rate of the diet medicine market.
Barclays analyst Luke Sergott said that at the same time, Catalent and Thermo are in a leading position in the market due to existing capabilities.
According to LSEG data, the current expected price-earnings ratio of Catalent's stock price is about 42 times.LonzaExpected price-earnings ratios of 28 times and 21 times higher than Thermo, respectively, reflect the company's current dominant position in the obesity industry despite some quality issues. Quality issues at the Brussels plant in Catalonia have led to a shortage of Wegovy.
Executives said that the competition for production capacity will not cause excess.
Stamoran of Catalent said,“Based on my 30 years of experience in this industry,CDMOIt doesn't follow the “if you do it, people will come” model. It's not a lasting way to build a CDMO business.”