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Eli Lilly to Invest $3B in Wisconsin Plant to Meet Obesity Drug Demand
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Eli Lilly (LLY - Free Report) recently announced its plans to spend $3 billion to expand the manufacturing facility in Wisconsin that was acquired earlier this year from Nexus Pharmaceuticals. Management expects to start construction on this expansion next year.
Through this new investment, Lilly intends to expand the manufacturing footprint for its injectable medications, especially its popular tirzepatide medications. Lilly markets tirzepatide as Zepbound for obesity and Mounjaro for type II diabetes.
Per management, this is Lilly’s single largest manufacturing investment outside its home state of Indianapolis. It plans to expand its workforce at this location by adding 750 highly skilled positions to the current team of over 100 employees.
This expansion plan increases the company’s total investment in the Wisconsin plant to $4 billion, building on the $23 billion committed by management since 2020 to building, expanding and acquiring manufacturing facilities worldwide.
LLY Stock Performance
Year to date, Eli Lilly’s shares have surged 41.6% compared with the industry’s 8.9% rise.
Image Source: Zacks Investment Research
Zepbound & Mounjaro: Key Drivers of LLY’s Top Line
Despite a short time on the market, Mounjaro and Zepbound have become key top-line drivers for Lilly in 2024, with demand rising rapidly. Mounjaro and Zepbound generated sales of $11.0 billion in the first three quarters of 2024, accounting for around 45% of the company’s total revenues.
However, the quarter-over-quarter growth of Zepbound and Mounjaro in 2024 has been impacted by supply and channel dynamics. Sales of both drugs were hurt due to inventory issues in the third quarter. However, the latest Zepbound data bodes well for Lilly and could help establish the drug as the new standard for obesity medications.
On Wednesday, Lilly reported that a phase III head-to-head study showed that patients treated with Zepbound lost more weight than those who received its rival Novo Nordisk’s (NVO - Free Report) popular weight-loss drug Wegovy. Data from this study showed that patients who received Zepbound achieved an average weight loss of 20.2%, superior to 13.7% for NVO's Wegovy.
Tirzepatide is also being developed for other indications like obstructive sleep apnea, heart failure with preserved ejection fraction, cardiovascular risks and metabolic dysfunction-associated steatohepatitis. Approval for these expanded indications can further boost sales. Wegovy, however, has an edge over Zepbound in this regard, as it is already approved to reduce cardiovascular risks.
Rising Competition in the Obesity Space
The obesity market has garnered much interest lately, with Lilly and Novo dominating this space with their respective drugs. Per research conducted by Goldman Sachs, the obesity market in the United States is expected to reach $130 billion by 2030. NVO’s Wegovy includes an ingredient called semaglutide. Semaglutide is also approved as Ozempic pre-filled pen and Rybelsus oral tablet for type II diabetes. Like Lilly, Novo Nordisk also faces periodic supply constraints and drug shortages of its semaglutide products.
Anticipating the huge demand for obesity drugs, several companies like Amgen (AMGN - Free Report) and Viking Therapeutics (VKTX - Free Report) are also developing their respective obesity drugs and making rapid progress in the space.
Last month, Viking Therapeutics presented updated results from the phase I study on the oral version of its obesity drug VK2735 at ObesityWeek. Data from this study showed that patients who received the highest drug dose lost up to 8.2% of their body weight after 28 days of daily dosing compared with 1.4% in the placebo group. In February, management reported that the phase II VENTURE study, which evaluated the SC formulation of VK2735, achieved its primary and all secondary endpoints with statistical significance.
Amgen also recently announced 52-week top-line data from a phase II study on MariTide, its GLP-1 therapy for obesity. The data showed that the AMGN drug led to approximately 20% average weight loss over 52 weeks without reaching a weight loss plateau.
AMGN and VKTX’s products can pose strong competition to Mounjaro/Zepbound and Ozempic/Wegovy in the future.
Image: Bigstock
Eli Lilly to Invest $3B in Wisconsin Plant to Meet Obesity Drug Demand
Eli Lilly (LLY - Free Report) recently announced its plans to spend $3 billion to expand the manufacturing facility in Wisconsin that was acquired earlier this year from Nexus Pharmaceuticals. Management expects to start construction on this expansion next year.
Through this new investment, Lilly intends to expand the manufacturing footprint for its injectable medications, especially its popular tirzepatide medications. Lilly markets tirzepatide as Zepbound for obesity and Mounjaro for type II diabetes.
Per management, this is Lilly’s single largest manufacturing investment outside its home state of Indianapolis. It plans to expand its workforce at this location by adding 750 highly skilled positions to the current team of over 100 employees.
This expansion plan increases the company’s total investment in the Wisconsin plant to $4 billion, building on the $23 billion committed by management since 2020 to building, expanding and acquiring manufacturing facilities worldwide.
LLY Stock Performance
Year to date, Eli Lilly’s shares have surged 41.6% compared with the industry’s 8.9% rise.
Image Source: Zacks Investment Research
Zepbound & Mounjaro: Key Drivers of LLY’s Top Line
Despite a short time on the market, Mounjaro and Zepbound have become key top-line drivers for Lilly in 2024, with demand rising rapidly. Mounjaro and Zepbound generated sales of $11.0 billion in the first three quarters of 2024, accounting for around 45% of the company’s total revenues.
However, the quarter-over-quarter growth of Zepbound and Mounjaro in 2024 has been impacted by supply and channel dynamics. Sales of both drugs were hurt due to inventory issues in the third quarter. However, the latest Zepbound data bodes well for Lilly and could help establish the drug as the new standard for obesity medications.
On Wednesday, Lilly reported that a phase III head-to-head study showed that patients treated with Zepbound lost more weight than those who received its rival Novo Nordisk’s (NVO - Free Report) popular weight-loss drug Wegovy. Data from this study showed that patients who received Zepbound achieved an average weight loss of 20.2%, superior to 13.7% for NVO's Wegovy.
Tirzepatide is also being developed for other indications like obstructive sleep apnea, heart failure with preserved ejection fraction, cardiovascular risks and metabolic dysfunction-associated steatohepatitis. Approval for these expanded indications can further boost sales. Wegovy, however, has an edge over Zepbound in this regard, as it is already approved to reduce cardiovascular risks.
Rising Competition in the Obesity Space
The obesity market has garnered much interest lately, with Lilly and Novo dominating this space with their respective drugs. Per research conducted by Goldman Sachs, the obesity market in the United States is expected to reach $130 billion by 2030. NVO’s Wegovy includes an ingredient called semaglutide. Semaglutide is also approved as Ozempic pre-filled pen and Rybelsus oral tablet for type II diabetes. Like Lilly, Novo Nordisk also faces periodic supply constraints and drug shortages of its semaglutide products.
Anticipating the huge demand for obesity drugs, several companies like Amgen (AMGN - Free Report) and Viking Therapeutics (VKTX - Free Report) are also developing their respective obesity drugs and making rapid progress in the space.
Last month, Viking Therapeutics presented updated results from the phase I study on the oral version of its obesity drug VK2735 at ObesityWeek. Data from this study showed that patients who received the highest drug dose lost up to 8.2% of their body weight after 28 days of daily dosing compared with 1.4% in the placebo group. In February, management reported that the phase II VENTURE study, which evaluated the SC formulation of VK2735, achieved its primary and all secondary endpoints with statistical significance.
Amgen also recently announced 52-week top-line data from a phase II study on MariTide, its GLP-1 therapy for obesity. The data showed that the AMGN drug led to approximately 20% average weight loss over 52 weeks without reaching a weight loss plateau.
AMGN and VKTX’s products can pose strong competition to Mounjaro/Zepbound and Ozempic/Wegovy in the future.
Eli Lilly and Company Price
Eli Lilly and Company price | Eli Lilly and Company Quote
LLY’s Zacks Rank
Eli Lilly currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.