Business

Eli Lilly to invest billions in weight loss drug site

Demand for the pharmaceutical company’s diabetes and weight loss injector pens is soaring

The announcement brings the US drugmaker’s total investment in the site, which is under construction near its Indianapolis headquarters, to $9 billion. Photograph: Jakub Porzycki/NurPhoto via Getty Images

Fri May 24 2024 - 15:52

Eli Lilly is investing a further $5.3 billion (€4.9 billion) in a new US manufacturing site, one of the biggest investments of its kind, to boost production of its hugely popular diabetes and weight loss drugs, the company said on Friday.

The announcement brings the US drugmaker’s total investment in the site, which is under construction near its Indianapolis headquarters, to $9 billion as it races to increase production of the active pharmaceutical ingredients (APIs) behind Mounjaro and Zepbound. The company’s diabetes and weight loss injector pens are currently facing shortages due to soaring demand.

Sales of the new class of drugs, known as GLP-1s, have propelled Eli Lilly to the status of the world’s biggest pharmaceutical group by market value, and along with rival treatments from Novo Nordisk could create a market worth more than $100 billion by the end of the decade, according to analyst projections.

Eli Lilly, which employs about 3,000 people in Ireland across three sites, was valued at $768 billion at market close on Thursday.

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David Ricks, Eli Lilly’s chief executive, said the announcement “tops the largest manufacturing investment in our company’s history and, we believe, represents the single largest investment in synthetic medicine API manufacturing in US history”. Mr Ricks added that the 600-acre site “will make our latest medicines, including Zepbound and Mounjaro” and “support pipeline growth”.

The investment was hailed by US government officials as an endorsement of President Joe Biden’s efforts to revive the manufacturing sector. Xavier Becerra, US health secretary, said Mr Biden’s policies had “encouraged” Eli Lilly to invest in the site in Lebanon, Indiana.

Since 2020, Eli Lilly has spent $18 billion on building out manufacturing operations across five sites in the US and Europe to help produce the raw material that goes into the manufacture of tirzepatide, the compound behind the drugs, and to boost “fill-finish” capacity, the process by which the drugs are formulated, sealed and filtered into the injectables.

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After breaking ground last year, the new Indiana site will begin producing medicines towards the end of 2026 and operations will continue to scale up through to the end of 2028, Eli Lilly said. An estimated 900 full-time employees will be based at the site. The Indiana state government has also pledged to invest in nearby infrastructure.

Eli Lilly and Novo Nordisk have warned previously that supply constraints will be a drag on weight loss drugs’ rollouts for the foreseeable future. Earlier this year, Novo Nordisk paid $11 billion to acquire three “fill-finish” plants from Catalent, as part of a three-way transaction in which its parent company took control of the drug manufacturer. Novo Nordisk is also spending $6 billion on boosting in-house production.

Almost all dose versions of Mounjaro and Zepbound, which were approved to treat weight loss in November last year, are in short supply, according to a US Food and Drug Administration database tracking medicine shortages. Novo Nordisk’s Wegovy weight-loss shot is also facing supply shortages but its diabetes drug Ozempic is available.

— Copyright The Financial Times

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