Weight-loss drugs in spotlight as pharma services firms rush to snap up business

A surge in sales of Novo Nordisk's drug Wegovy, which launched in the US in mid-2021, has propelled the Danish drugmaker to become Europe's most valuable company.

Soaring demand for obesity drugs was in the spotlight at the world's largest trade show for the pharmaceutical services industry this week, as it fuels a boom for firms that fill and assemble the self-injection pens.

A surge in sales of Novo Nordisk's drug Wegovy, which launched in the US in mid-2021, has propelled the Danish drugmaker to become Europe's most valuable company.

US rival Eli Lilly has become the world's most valuable healthcare firm this year as demand for its diabetes drug Mounjaro surges ahead of approval for its use as a weight-loss treatment in the US, expected by the end of this year.

Amid a global obesity crisis, some analysts predict the market for weight-loss drugs could be worth $100bn (€95bn) by 2030. Some companies, like West Pharmaceutical Services, whose share price is up 37% year to date, are already providing components for the injections pens and reaping rich rewards from the business.

Other companies specialising in parts of the manufacturing process for the injections are vying to get a bigger foothold by scaling up their capacity.

Wegovy and Mounjaro, both administered once weekly, are part of a class of drugs called GLP-1 receptor agonists originally developed for type 2 diabetes, which suppress appetite.

"Having capacity to serve GLP-1 manufacturing demand now is gold, and there is a little bit of an arms race to capture that market share," said Tommy Erdei, a senior healthcare investment banker at Jefferies.

The specialist process of filling the syringes used in the pens, called aseptic or sterile fill-finish, is particularly in demand.

Pharma giant Thermo Fisher is converting a building that manufactures tablets and pills at its North Carolina factory in the US to do sterile fill-finish work instead, a company spokesperson said.

Meanwhile, Thermo Fisher has officially opened an expanded laboratory at its Cork campus, doubling its capacity to develop medicines for cancer, lupus, diabetes and psoriasis, among other illnesses.

The new lab is the company's latest expansion of its active pharmaceutical ingredient facility since taking over the site for €90m from GlaxoSmithKline in 2019.

Thermo is already filling Wegovy pens for Novo in North Carolina, according to Reuters.

Other pharma services companies are following suit.

Diosynth Biotechnologies, a subsidiary of Japan's Fujifilm Corp, expects to announce by the end of this year a major contract with a company for sterile fill-finish work at its expanded facilities in Texas and Denmark, CEO Lars Petersen told Reuters.

• Reuters with additional reporting by the Irish Examiner