Barcelona: The soaring demand for drugs to combat obesity was highlighted at the largest trade show for the pharmaceutical services industry this week, as it spurs on a boom for companies that fill and assemble the self-injection pens.
The launch of Novo Nordisk’s drug Wegovy in mid-2021 in the United States has led the Danish pharmaceutical manufacturer to become Europe’s most valuable company.
American competitor Eli Lilly has become the world’s most valuable healthcare company this year as the demand for its diabetes drug Mounjaro surges ahead of its expected approval for use as a weight loss treatment in the United States by the end of this year.
Amidst a worldwide obesity crisis, some analysts predict that the market for weight loss drugs could reach a value of $100 billion by 2030. Some companies, such as West Pharmaceutical Services, which has seen a 37% increase in its share price this year, are already providing components for the injection pens and reaping substantial rewards from the business. Other companies that specialize in different aspects of the manufacturing process for the injections are competing to gain a larger share of the market by increasing their capacity.
Wegovy and Mounjaro, both administered once a week, belong to a class of drugs known as GLP-1 receptor agonists that were originally developed for type 2 diabetes and have the ability to suppress appetite.
“Having the capacity to meet the manufacturing demand for GLP-1 drugs is incredibly valuable, and there is a competitive race to capture that market share,” said Tommy Erdei, a senior healthcare investment banker at Jeffries, prior to the CPHI trade show held in Barcelona this week.
The specialized process of filling the syringes used in the pens, known as aseptic or sterile fill-finish, is in particularly high demand.
Thermo Fisher is converting the building that currently produces tablets and pills at its North Carolina factory in the United States to instead focus on sterile fill-finish work, according to a company spokesperson.
Three sources familiar with the matter have stated that the site will handle GLP-1 business. The client’s name has not been disclosed, but Thermo is already filling Wegovy pens for Novo in North Carolina.
Other pharmaceutical services companies are following suit.
FUJIFILM Diosynth Biotechnologies, a subsidiary of Japan’s Fujifilm Corp, expects to announce a major contract for sterile fill-finish work with a company at its expanded facilities in Texas and Denmark by the end of this year, according to CEO Lars Petersen.
While large pharmaceutical companies have often outsourced aspects of their manufacturing to save costs, Novo and Lilly are relying on the expertise of contract drugmakers in newer technologies such as sterile fill-finish, said Andre Valente, a partner at L.E.K. Consulting’s London office who advises investors in the healthcare industry.
This boon, which is helping to offset the loss of lucrative COVID-19 vaccine contracts for many pharmaceutical services companies, was a major topic of discussion at the trade fair, particularly since Novo and Lilly have not provided many details about their manufacturing supply chains or their partners. The two companies have not disclosed plans to expand their in-house manufacturing, even though they are investing billions to increase their output.
Catalent stated earlier this month that it will have new sterile fill-finish capacity available at its facility in Italy in 2024. According to a source at the trade show, construction of another manufacturing line at the site is likely to commence as soon as the current work is completed.
The company already performs filling for Novo at its factories in Belgium and the United States.
PCI Pharma Services, which assembles and packages self-injection devices, has invested hundreds of millions of dollars over the past five years to position itself to meet the anticipated demand for GLP-1 drugs, according to CEO Salim Haffar.
The company estimates that it will have the capacity to handle approximately half of the volume for device assembly for obesity and diabetes medications that will be on the market in this class by 2030, he said. He declined to provide further details.
Lilly’s diabetes drug Mounjaro could also benefit companies specializing in the production of active pharmaceutical ingredients (API) with expertise in peptide manufacturing, executives said. Novo produces its API in-house.
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