U.S. pharmaceutical company Eli Lilly has begun mass production of its oral obesity treatment before formal approval and launch. This is aimed at proactively responding to a surge in demand immediately following its release. The industry interpreted this as Lilly's strategy to become a leader in the oral obesity drug market, unlike the injectable obesity drugs that have been overshadowed by Denmark's Novo Nordisk.
On the 20th (local time), Eli Lilly announced an asset of $548.1 million (7.8 billion won) for the pre-launch inventory of its oral obesity treatment orforgliprone in its annual financial report submitted to the U.S. Securities and Exchange Commission (SEC). They began mass production of the new drug prior to receiving approval, which is scheduled for launch next year.
Orforgliprone is Eli Lilly's second glucagon-like peptide-1 (GLP-1) based obesity drug, developed following the injectable obesity treatment Zepbound (marketed as Mounjaro in South Korea), and it is the first oral obesity drug. It increases convenience compared to existing injectables by allowing once-daily oral dosing. The global phase 3 clinical trial results for orforgliprone will be released in April.
Pharmaceutical companies also list pre-launch inventory volumes in their financial reports, but Eli Lilly received evaluations that it is unusual due to the significant gap in timing. Reuters reported, "The move to mass-produce a drug that is more than a year away from launch is unprecedented."
Eli Lilly recorded its pre-launch inventory as an asset, demonstrating confidence in orforgliprone. Although it has not yet received product approval, if the prospects for commercial success are deemed high, the costs of the inventory produced before launch are recorded as assets.
The industry analyzed that Eli Lilly secured inventory in the oral obesity drug market to avoid following the same path as its injectable obesity drugs. Eli Lilly lagged more than two years behind Novo Nordisk's injectable obesity drug. Novo Nordisk's Wegovy was approved by the U.S. Food and Drug Administration (FDA) in June 2021 and launched, while Lilly's Zepbound entered the market later in December 2023. The early release of Wegovy captured over 70% of the market share, while Zepbound trailed behind.
Kevin Gade, chief operating officer (COO) of U.S. investment advisory firm Bahl & Gaynor, told Reuters, "The inventory of the obesity drug that Lilly has recorded is at a level similar to the pre-launch inventory of the COVID-19 vaccine," and analyzed that "this reflects Lilly's desire to launch the obesity drug as soon as possible to gain a competitive edge in the market."
There are evaluations that this proactive inventory securing is to prevent a repeat of the supply shortage that occurred with Zepbound. Zepbound has consistently faced shortages since its launch. The U.S. Food and Drug Administration (FDA) manages drugs whose supply cannot keep up with surging demand by placing them on the "drug shortage lists," and both Zepbound and Wegovy were listed together on that list in April of last year.
Eli Lilly removed Zepbound from the supply shortage list in October last year through a significant investment in manufacturing facilities. Wegovy was also excluded from the FDA's supply shortage list on the same day. Lilly's Zepbound, which was removed from the list first, proved the importance of securing inventory as it aimed for the top spot in the injectable obesity drug market.
According to Reuters, in early March of last year, the number of new prescriptions for Zepbound in the U.S. first exceeded that of Wegovy. Many experts also estimated that by August of last year, Zepbound was capturing 40% of the U.S. obesity drug market while following closely behind Wegovy.
Meanwhile, Novo Nordisk is also developing an oral obesity drug. They are researching to create a pill form of amylin, a pancreatic hormone that affects hunger. Other pharmaceutical companies, including the British AstraZeneca, are also developing oral obesity drugs.