Are we entering a new era of blockbuster weight-loss drugs?
As revenues for diabetes treatments decline, has the industry found new revenue drivers in weight loss treatments? Ben Hargreaves discovers that a newly approved obesity treatment drug is in short supply and learns how the industry is rapidly ramping up manufacturing capacity.
Traditionally, the diabetes treatment area has been a strong revenue segment for the pharmaceutical industry. However, with patents expiring and the debate over insulin pricing becoming a common topic in American politics, the therapeutic field is not as stable as it once was. As a result, companies that relied on this area for revenue are now looking to drive growth in other areas, such as by developing new diabetes treatments and innovating existing treatments.
Part of a new wave of diabetes treatment has seen the development of glucagon-like peptide-1 (GLP-1) agonists. These treatments work by stimulating the body to produce more insulin, and the extra insulin helps lower blood sugar levels—making it suitable for helping manage type 2 diabetes. One of the main types of such treatments, semaglutide (also known as Ozempic, Wegovy, and Rybelsus), was found to be effective in lowering blood sugar levels in clinical trials and was well tolerated by patients in clinical trials. Another benefit is that Rybelsus can deliver treatment through an oral formulation, an advantage over other forms of GLP-1 agonists that rely on injections. However, there was another benefit of the treatment that caught the researchers' attention.
With time and more data, the researchers found that semaglutide was also able to reduce the incidence of cardiovascular events in patients with type 2 diabetes and lead to further reductions in fat mass. As a result, the therapy's owner, Novo Nordisk, won approval from the US Food and Drug Administration (FDA) to use semaglutide to treat obese patients with at least one weight-related disorder, such as high body weight. Blood pressure, high cholesterol, or diabetes. In the process, the therapy became the first new weight loss treatment in seven years when it was approved.
Wegovy's clinical trials showed that people who received the treatment lost an average of 14.9% of their body weight after 68 weeks when combined with a low-calorie diet and increased physical activity. In comparison, patients taking the placebo lost 2.5 percent of their body weight. Overall, 83.5 percent of patients taking Wegovy lost more than 5 percent of their body weight, and 30.2 percent lost more than 20 percent of their body weight.
Novo Nordisk isn't the only company exploring GLP-1 as a treatment for obesity. Eli Lilly, another company with an established diabetes portfolio, is also exploring the potential of its treatment Mounjaro (tirzepatide) to treat obesity. The therapy already has FDA approval for type 2 diabetes in May 2022, and Lilly is starting to ramp up its manufacturing capacity for the treatment ahead of any additional approvals. Amgen is another company looking to enter the space as it advances its obesity drug candidate into mid-stage trials.
in the public eye
As more research surrounds semaglutide's potential to help with weight loss, public interest in the drug has grown. A Google Trends analysis of search frequency for “Ozempic for weight loss” shows that even before Wegovy was approved in the field, people were asking about the treatment's potential uses. As you can see from the graph below, interest has skyrocketed in recent months.
The interest in the product is partly due to the amount of publicity it has received for its apparently widespread use in Hollywood circles for weight loss purposes, even if those involved are not obese. Elon Musk has publicly tweeted that he lost weight using a combination of Wegovy and fasting, and other celebrities have taken note of their use of the regimen. This increased interest is likely to only increase as the therapy begins to be commercialized more broadly outside the United States.
If this increased interest does emerge, it will put more pressure on the supply of GLP-1 products. Novo Nordisk's Ozempic and Wegovy are currently in shortage, the former since August 2022 and the latter since December 2022, according to the FDA database. The company responded by investing heavily in expanding its manufacturing network, as it announced a $776 million plan to increase capacity at its factory in Bagsværd, Denmark. The move is one of a series of such investments, including a decision in December 2021 to build three new manufacturing plants in Kalundborg, Denmark, which will cost the company $2.4 billion.
A spokesperson for the company reached out to Novo Nordisk directly to explain the shortage: “When we launch this drug in the US in 2021, we have seen tremendous interest from the healthcare community and patients, resulting in an unprecedented Product demand. Shortly thereafter, we experienced issues at Wegovy’s contract manufacturing site, resulting in a supply shortage.”
In the fourth-quarter results, Camilla Sylvest of Novo Nordisk's business strategy and corporate affairs division said GLP-1 sales in North America were up 36% year-over-year and 57% outside the US. However, Sylvester said, “unfortunately, strong sales growth has led to periodic supply constraints and related drug shortage notifications for some products and geographies.”
Novo Nordisk has been slow to roll out the treatment to other regions due to supply issues and high demand for the product. Wegovy was approved in the EU in January 2022, but has so far only launched the product in Denmark and Norway in the region. When Pharpharum asked if the company planned to expand access in Europe, the spokesman said, “We expect to launch the product in multiple countries in 2023,” but declined to specify which countries.
In terms of how the company is currently working to expand supply, the spokesperson outlined that capacity is expected to increase with a second contract manufacturing organization (CMO) commencing commercial production of the product in the first half of 2023. Additionally, the company will open a second manufacturing facility in partnership with another CMO. The spokesperson also noted that the company plans to further invest in capacity at all relevant sites in 2023. With the company projecting obesity sales to hit $3.69 billion by 2025, more than double its previous forecast, it's clear that expanding its production capacity, which the company expects to grow rapidly, is a worthwhile investment.