While an ongoing production expansion push for Eli Lilly's popular tirezeptide-based medicines Mounjaro and Zepbound should help out with perpetual supply strains later this year, the expected gains are no match for rampant demand.
Still, Lilly is confident enough in its production build-outs to dial up its financial guidance for the year on Tuesday.
Lilly ended the first quarter with wholesaler backorders for the GLP-1 drugs indicating tight supply. Almost all dosage strengths of the injections made an appearance on the FDA’s shortage list earlier this month.
The supply strains are expected to continue as increasing production volume can’t keep up with the demand, Lilly said. Now, short- to mid-term sales growth for the drugs will mainly come down to the amount of product the company is able to produce and ship out.
That’s not to say that the drugmaker doesn’t have high hopes for its ability to make sales. In fact, Lilly cranked up its full-year guidance by $2 billion to a range between $42.4 billion and $43.6 billion, citing “greater visibility into the company’s production expansion for the remainder of the year.”
Other than a North Carolina plant expected to come online by the end of this year and a Germany site slated to become operational in 2027, the company recently acquired Nexus Pharmaceuticals’ Wisconsin injection production facility, which will be solely devoted to Lilly’s products by the end of 2025.
That brings the total to seven sites that are either “ramping up or under construction,” chief financial officer Anat Ashkenazi explained on the company’s first-quarter earnings call.
At this point in the year, the company is able to “feel more confident” in the nodes of capacity across its supply chain and expects increases in supply to kick in during the second half of this year, Ashkenazi said. Still, the gap between supply and demand is expected to continue for the remainder of this year and possibly into next, she said.
Outside of meeting existing patients’ needs, new potential tirzepatide indications on the horizon will make additional supply capacity crucial.
Earlier this month, the company proved Zepbound’s potential to help treat those with obstructive sleep apnea (OSA) through two phase 3 studies. The results showed that OSA patients on Zepbound had about 30 fewer sleep apnea events per hour than those in the placebo group.
Lilly expects to begin its regulatory filings for that indication in the middle of this year.
Total tirzepatide sales overall, which includes Mounjaro’s $1.8 billion contribution and $517 million from Zepbound, fell below consensus from Leerink Partners, the analysts wrote in a note to clients.
Those drugs, plus breast cancer drug Verzenio and Boehringer Ingelheim-partnered Jardiance, helped drive a total revenue boost of 26% to $8.7 billion.