BMO Capital Markets analyst Evan Seigerman called it “another positive indication” for Eli Lilly, which is growing market share in incretin products as manufacturing continues to expand, while noting the drugmaker could start to benefit heading into third quarter earnings.
The FDA on Wednesday announced that all doses of Eli Lilly’s obesity treatment tirzepatide—branded as Mounjaro for type 2 diabetes and Zepbound for weight management—are now available.
Still, patients may encounter limited supplies at some pharmacies, according to the FDA’s drug shortages webpage. This is due to various “factors,” the regulator explained, such as the ordering practices and incentives of specific pharmacies, as well as retailer capacity constraints and logistical considerations related to the supply chain.
“Patients may experience variability at a particular pharmacy location regardless of whether a drug is in shortage,” according to the FDA.
The FDA’s supply update on Wednesday comes after Lilly struggled for months to keep up with the market’s insatiable appetite for its incretin therapies. In April 2024, the regulator announced that the 7.5-mg, 10-mg, 12.5-mg and 15-mg doses of Mounjaro would have limited availability throughout that month, driven primarily by a spike in demand.
Later that same month, the FDA expanded its shortage notice, also covering the 5-mg dose of Mounjaro, as well as all but the lowest strength of Zepbound. At the time, the regulator expected the shortage to last through the second quarter of 2024.
BMO Capital Markets analyst Evan Seigerman in a note to investors called Wednesday’s confirmation that tirzepatide is no longer in shortage “another positive indication” for Lilly’s growing incretin portfolio.
“With Lilly able to adequately supply current and future demand for tirzepatide, we believe it could continue to grow market share in incretin products as manufacturing continues to expand,” Seigerman wrote.
Wednesday’s announcement from the FDA “further confirms Lilly’s strength of supply could start to benefit the company heading into 3Q earnings,” according to Seigerman, who also noted that with tirzepatide no longer on the regulator’s shortage list compounded products can no longer be sold.
To shore up its supply of tirzepatide, Lilly has been aggressively investing in its manufacturing capacity.
On Wednesday, Lilly announced a $4.5 billion investment for the construction of a new facility in Indiana that will house both R&D and manufacturing activities. Dubbed the Lilly Medicine Foundry, the new site will allow the pharma to develop “innovative solutions” for optimizing its manufacturing operations, while also increasing its overall capacity for clinical trial medicines.
The Lilly Medicine Foundry is expected to open in late 2027 and will add around 400 new jobs for engineers, scientists, lab technicians and operations personnel once fully operational.
In May 2024, Lilly made a $5.3 billion commitment to Indiana to support a “multi-site campus” dedicated to production of its products, including Zepbound and Mounjaro, CEO David Ricks said in a statement at the time. Last month, Lilly pumped $1.8 billion into its Ireland footprint to boost its manufacturing capacity.
Meanwhile, obesity rival Novo Nordisk appears to still be having trouble with its semaglutide supply. According to the FDA database, the 0.25-mg dose of Novo’s weight loss drug Wegovy continues to be in shortage.
Like Lilly, Novo has made significant manufacturing investments, including the $16.5 billion acquisition of Catalent in February and a $4.1 billion commitment in North Carolina in June.
