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Lilly counts on manufacturing scale-up to unstick obesity drug supply

Eli Lilly expects that, by the second half of this year, it will be able to manufacture at least 50% more sellable doses of the main ingredient in its GLP-1 medicines Zepbound and Mounjaro than it could during the same period last year.

The push to bolster the production capacity for the drugs, respectively sold for obesity and diabetes, is “the most ambitious expansion plan in our company’s history,” CEO David Ricks said on a first quarter earnings call with analysts Tuesday.

Delivering on that goal is imperative for Lilly, which on Tuesday also raised its revenue guidance for the year to between $42.4 billion and $43.6 billion. The $2 billion increase is primarily due to forecast growth from Mounjaro and Zepbound, the company said.

Lilly will expand its production capacity “across the supply chain,” CFO Anat Ashkenazi said, with multiple “nodes” coming on line to begin shipping more finished doses of Mounjaro and Zepbound. Also helping is European regulatory approval of a multidose injection device called Kwikpen that will allow more people with diabetes or obesity to access the drugs, Ashkenazi said.

In total, the company has seven manufacturing sites either ramping up or under construction, Ashkenazi said.

Constrained supply — doses of Mounjaro and Zepbound are currently in shortage in the U.S. — was a factor in Lilly reporting lower-than-expected sales for Mounjaro. The drug’s $1.8 billion in revenue came in about $200 million below Wall Street forecasts, although Zepbound’s $517 million in first quarter revenue surpassed them.

Lilly rival Novo Nordisk has faced similar problems scaling up production for its diabetes and weight loss drugs Ozempic and Wegovy.

Coverage of Zepbound by U.S. commercial insurers is improving, Lilly said, with about 67% access as of April 1. And while weight loss drugs aren’t covered by Medicare, Lilly science chief Dan Skovronsky said he expects to the federal program to cover treatment for people with obesity and obstructive sleep apnea should the Food and Drug Administration approve Zepbound for that use based on the results of a recent Phase 3 trial.

Should the drug also prove, in ongoing trials, that it can protect against heart failure and heart attacks, Skovronsky said he believes Medicare will extend coverage in those settings, too. Novo has already gained partial Medicare coverage for Wegovy as a treatment for preventing cardiovascular events in people with obesity.