Who doesn't want to be the next Jia Ling? In high demand, the "weight loss duo" expands production smoothly.

After losing 100 pounds, Jia Ling made her first public appearance and overnight, she dominated the trending lists on various social media platforms, becoming a new role model for many people who want to lose weight painlessly.

There are still many people who want to achieve the same weight loss success as Jia Ling, but the "miracle weight loss pill" is still hard to come by.

The good news is that Novo Nordisk AS and Eli Lilly are working hard to change this situation, and both companies have made encouraging progress in increasing the supply of GLP-1 class weight loss drugs.

The "weight loss duo" is accelerating their production expansion.

Novo Nordisk AS announced last week that the supply of the low-dose version of the Wegovy injection pen in January has increased by more than double compared to the previous months, which will meet the weight loss needs of more people. Since May last year, supply shortages have forced Novo Nordisk AS to limit the supply of low-dose weight loss drugs in the United States.

According to data released by the Food and Drug Administration (FDA) Drug Shortages Database on Monday, the 0.25, 0.5, 1, and 1.7 mg doses of Wegovy are still "limited in supply". Obese patients usually start with a 0.25 mg dose and increase the dose over time to alleviate side effects such as nausea.

Executives at Novo Nordisk AS stated during the fourth-quarter earnings conference call last week that the company plans to gradually increase the supply of Wegovy this year.

Similarly, executives at Eli Lilly stated during the fourth-quarter earnings conference call on Tuesday that the company has achieved its goal of doubling the production capacity of its intestinal proinsulin drugs by the end of 2023.

Eli Lilly's diabetes drug Mounjaro and weight loss drug Zepbound are both intestinal proinsulin drugs that suppress appetite and regulate blood sugar by mimicking intestinal hormones. According to the FDA, the supply of certain doses of Mounjaro is also limited.

Executives stated that Eli Lilly will "urgently" expand production this year, and the most significant increase in production will occur in the second half of the year. By then, the production of its sellable doses of intestinal proinsulin drugs will increase by at least 1.5 times compared to the second half of 2023.

Cantor Fitzgerald analyst Louise Chen commented on the supply issue, saying, "I think it will take a few years for this problem to be resolved on its own, but both companies will gradually start meeting market demand."

Novo Nordisk AS's acquisition of Catalent, a pharmaceutical packaging giant, is expected to increase the supply of Wegovy.

Novo Nordisk AS announced on Monday that Novo Holdings, the controlling shareholder of Novo Nordisk AS, has agreed to acquire Catalent for $16.5 billion (including debt). Catalent is the main supplier for the packaging of Wegovy, including the filling and packaging of syringes and injection pens.

As part of the deal, Novo Holdings will resell Catalent's three key facilities to Novo Nordisk AS for $11 billion. Novo Nordisk AS stated that these three facilities will gradually start production in 2026.

Currently, Novo Nordisk AS is planning to build a new factory or add more production lines to existing factories. According to a report by TD Cowen analyst Michael Nedelcovych on Tuesday, acquiring Catalent may help Novo Nordisk AS "increase production faster" and be more cost-effective compared to these initiatives.

During a quarterly earnings conference call on Tuesday, Anat Ashkenazi, CFO of Eli Lilly, expressed concerns about the acquisition as Eli Lilly has a contract with Catalent to produce some of its drugs.

However, Chen from Cantor Fitzgerald stated that Eli Lilly believes Catalent does not have significant production operations, so the acquisition may not have a significant impact on Eli Lilly's drug production.

New factories or increased long-term supply

Both Novo Nordisk AS and Eli Lilly have invested billions of dollars in building new production facilities to increase the supply of weight loss and diabetes drugs in the coming years.

On Tuesday, local time, Eli Lilly announced that its new factory in Concord, North Carolina, is expected to start producing intestinal insulin drugs as early as the end of this year and begin shipping in 2025. The factory in the Research Triangle Park in North Carolina started production last year.

According to a report by Morgan Stanley analysts on Sunday, it is expected that these two factories will significantly increase Eli Lilly's production capacity for auto-injectors of Mounjaro, Zepbound, and another diabetes drug, Trulicity.

Eli Lilly also plans to build additional facilities in the coming years. The company announced in November last year that it will invest $2.5 billion to build an injection product manufacturing base in Germany, which will start construction this year.

Prior to this, Eli Lilly has already invested over $3 billion in building two new manufacturing plants in Indiana.

Meanwhile, Novo Nordisk AS announced in November last year that it will invest $6 billion to expand its production base in Denmark, with construction scheduled from the end of 2025 to 2029. Novo Nordisk AS also stated that it will invest approximately $2.3 billion to build a new factory in France. Alternative weight loss drugs are expected to supplement the supply in the future.

Eli Lilly plans to launch a Mounjaro injection called KwikPen in certain markets outside the United States, which is expected to help expand the supply of intestinal proinsulin drugs. The drug has already been approved in the UK.

KwikPen is a four-dose injection pen that covers a month of treatment. Patients using an auto-injector would need to use four pens per month.

According to analyst Mohit Bansal from Bank of America, if Eli Lilly introduces diabetes and weight loss drugs in the form of KwikPen in the United States, it could become a "source of increased supply" in the market by 2025.

However, both Eli Lilly and analysts have stated that oral weight loss and diabetes drugs are generally easier and cheaper to manufacture, and will be key in meeting demand.

In addition, Eli Lilly is developing an oral GLP-1 class weight loss drug called orforglipron, which may have advantages over experimental weight loss drugs from Novo Nordisk AS and Pfizer.

In a mid-stage trial, Eli Lilly's drug helped overweight/obese patients lose 14.7% of their body weight after 36 weeks, consistent with the weight loss achieved with Novo Nordisk AS' oral drug, but in a shorter period of time.

However, orforglipron will not be launched soon, and Eli Lilly may release late-stage trial data for the drug in 2025.