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Weight-Loss Medications Create A Boom For Companies That Fill Syringes

Weight-Loss Medications Create A Boom For Companies That Fill Syringes
Contract medicine makers looking to enter the brisk weight-loss drug business are investing billions of dollars to expand or create factories that fill the injection pens needed to give treatments such as Novo Nordisk's Wegovy.
In interviews with a dozen executives, analysts, and investors, it was revealed that pharmaceutical services companies were competing for more of the specialised task of filling the syringes used in the pens, a process known as fill-finish.
"Every contract manufacturer that has sterile fill-finish capacity wants to add more, to get ahead, because it's not just about Wegovy anymore," said Tejas Savant, senior healthcare equity analyst at Morgan Stanley. "You also have Lilly’s Mounjaro coming, and others."
Since its arrival in the United States in June 2021, sales of Wegovy, the first of a new series of obesity therapies that imitate the body's appetite-suppressing hormones, have skyrocketed.
Mounjaro by Eli Lilly is scheduled to be approved for weight loss in the United States this year.
The monthly weight-loss injections are part of a family of medications known as GLP-1 agonists, which experts say might be worth up to $100 billion within a decade if oral treatments developed by Pfizer and others are successful.
WuXi Biologics CEO Chris Chen told Reuters that his company is in discussions with clients about using pre-filled syringe capacity that it is installing at a German factory it purchased in 2020.
He described interest as "pretty high," and stated that he plans to buy other factories in Europe to service GLP-1 customers, but provided no further details.
According to Cornell Stamoran, Catalent's vice president of corporate strategy and government affairs, the company is expanding "significant" pre-filled syringe capacity at factories in Anagni, Italy, and Bloomington, Indiana, in the United States. They will be operational in 2024.
The company in the United States already undertakes Wegovy fill-finish work.
Last year, the competition for business among contract development and manufacturing organisations (CDMOs) began. Several initiatives costing at least $3 billion have been announced since then by businesses such as Lonza, Fujifilm Diosynth Biotechnologies, a subsidiary of Fujifilm Corp, and Germany's Vetter.
With Lilly ready to launch Mounjaro and Novo straining to meet demand even as it expands Wegovy into new territories, the pace is picking up.
Another Novo partner, Thermo Fisher, is upgrading facilities used to fill COVID-19 vaccination syringes to handle pens for obesity and diabetes medications, according to CEO Marc Casper, who spoke last month at a Morgan Stanley health conference.
He stated that there was a severe scarcity of capacity. A spokeswoman for the corporation declined to comment.
When large pharmaceutical companies lack in-house expertise or scale, they turn to CDMOs. To avoid contamination, syringes are filled in sterile conditions before pens are assembled and packaged and distributed to pharmacies and clinics by wholesalers.
Novo is investing billions of dollars to boost its own Wegovy output and aims to add more contract manufacturing sites to the three already operated by Catalent and Thermo.
Nonetheless, shortages will continue throughout next year.
Lilly is also boosting internal capacity, but for the time being, according to a spokesman, it is relying on a "extensive portfolio" of CDMOs. Trials of its medicine Mounjaro revealed that it was more effective than Wegovy.
According to The Insight Partners, the fill-finish industry will more than quadruple to $12.5 billion between 2019 and 2027. According to an industry expert, this is roughly twice the rate for pills or capsules.
The new GLP-Executives believe that their No. 1 business may more than compensate for the loss of COVID-19 vaccination contracts.
The Inflation Reduction Act of the United States is also promoting the development of biologic medications, some of which are injected. Injections are becoming more common in geriatric care settings, and some new Alzheimer's and generic arthritis medications are provided via injection.
Companies, however, stated that GLP-1s are the primary rationale for investment.
Many projects will not be completed until next year, or in some circumstances until 2026, implying that supply shortages would likely endure. According to one healthcare investor, the ability of CDMOs to increase capacity will decide how quickly the obesity medicine industry grows.
Meanwhile, Catalent and Thermo are "in the catbird seat" because of their existing skills, according to Barclays analyst Luke Sergott.
According to LSEG statistics, Catalent shares are presently trading at roughly 42 times predicted earnings over the next 12 months, compared to 28 for Lonza and 21 for Thermo, highlighting its current supremacy in the obesity race despite some quality difficulties. According to Reuters, Wegovy shortages were caused by quality issues at Catalent's Brussels production in July.
According to executives, the rush for capacity will not result in a surplus.
"CDMOs don't follow a 'build it and they will come' model, based on my 30 years in the industry. That's not how you build a CDMO business to last," Catalent's Stamoran said.

Christopher J. Mitchell

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