By Bhanvi Satija and Patrick Wingrove
(Reuters) -Explosive demand for Eli Lilly’s weight-loss drug Zepbound and increased manufacturing capacity prompted the company on Tuesday to raise its annual sales forecast to $2 billion, sending its shares up nearly 5%. Hui.
Lilly said it expected to significantly ramp up production of its obesity treatment and related diabetes drug Monzaro in the second half of the year, with most doses in short supply due to high demand.
Skyrocketing demand for Monjaro and Zepbound, both chemically known as tirazepate, has pushed the Indianapolis-based drugmaker’s market value to more than $700 billion — surpassing even Tesla and Walmart.
The company said sales growth will depend on how many drugs it can produce and ship in the short to medium term.
“We have sites working 24/7. We’re doing construction all night long,” Chief Financial Officer Anat Ashkenazi said on an investor call.
He said the approval of Lilly’s multi-dose KwikPen for Monjaro in Europe came in slightly ahead of the company’s expectations, giving it additional confidence in its ability to launch there.
Monjaro is approved in Europe for both diabetes and weight loss.
The drug manufacturer has six manufacturing sites for the medicines. Lilly said it has made progress at its $2.5 billion manufacturing site in Germany, and expects its Concord, North Carolina site to begin producing Zepbound and Monjaro by the end of the year.
Lilly said last week it would acquire a manufacturing facility from privately held Nexus Pharmaceuticals to produce injectable drugs. Production at its seventh facility in Wisconsin is planned to begin in late 2025.
Edward Jones analyst John Boylan said, “Although there is still some capacity to be built to meet that demand, they are making more progress than we thought and that was a welcome surprise.”
Ashkenazy said that despite the company’s efforts, demand for the treatment will exceed supply this year and potentially next.
‘Very demanding’
The U.S. Food and Drug Administration has said it is expected to run out of doses for most of Zepbound and Monjaro by the second quarter of this year.
Eli Lilly and Danish rival Novo Nordisk are racing to ramp up production in a weight-loss market that is projected to reach at least $100 billion by the end of the decade. Both companies’ obesity treatments belong to a class of drugs originally developed for diabetes known as GLP-1 agonists.
It has been observed that GLP-1 drugs help patients lose weight by an average of 20%, thereby increasing the unique demand.
“There is a lot of demand for these…treatments and I would say Lilly is doing a good job of trying to address this situation,” said David Song, investment partner at TEMA ETFs.
Lilly and Novo are also working to provide clinical evidence that their GLP-1 drugs have therapeutic benefits beyond diabetes and weight loss, such as heart protective properties that could increase insurance coverage.
A Lilly official on the call said the company expects Zepbound to be covered for patients insured under the U.S. Medicare program once it receives approval for obstructive sleep apnea, following positive late-stage data in April.
Zepbound posted sales of $517.4 million in the first quarter, beating analysts’ expectations of $418.20 million, according to LSEG data.
Monzaro’s sales rose to $1.81 billion from $568.5 million last year, but still fell short of Wall Street’s estimate of $2.08 billion, which analysts attributed to limited supply.
Despite a strong start, total prescriptions for Lilly’s Zepbound have lagged behind Novo’s popular weight-loss drug Vegovy.
In the United States, an average of about 63,000 Zepbound prescriptions have been written each week through April 19 through 2024, compared with 110,000 for Wegovi, according to IQVIA data seen by Reuters.
This brings the total to more than 1 million Zepbound prescriptions written in the United States since the beginning of 2024, and nearly 1.75 million for Wegovi.
Eli Lilly raised both ends of its 2024 revenue forecast by $2 billion and now expects $42.4 billion to $43.6 billion for the year. The drugmaker also raised its annual profit forecast by $1.30 per share to $13.50 to $14 per share.
The company reported adjusted profit of $2.58 per share, 12 cents above analysts’ expectations.
Shares of Lilly, which are up 26% so far this year, rose 4.6% to $771.44.
(Reporting by Bhanvi Satija and Sriparna Roy in Bengaluru and Patrick Wingrove in New York; Editing by Devika Shyamnath and Bill Burkroot)
