With growing prescriptions for weight-loss-aiding drugs, companies manufacturing them are making big money.
The frenzy for the drug has built up in recent months, with weight-loss-aiding drugs like Novo Nordisk’s Wegovy and Ozempic and Eli Lilly’s Mounjaro being touted as a “miracle.” The effect of that reflects in the money pharma giants behind these drugs have made, owing to soaring demand.
Danish giant Novo’s sales in obesity and diabetes drugs jumped 36% to nearly $22 billion in the first nine months of 2023, the company reported Thursday. Just the sale of Wegovy had skyrocketed by eight times in the third quarter compared to the sale time a year earlier, giving the company a $900 million boost and reminding the world why weight-loss drugs are having their moment now. The company’s sales have grown exponentially, catapulting Novo to become Europe’s most valuable company in September.
But Novo isn’t alone in reaping the benefits of the seemingly insatiable appetite for weight-loss drugs—Indianapolis-based Eli Lilly has made big gains from it, too. Its diabetes medication Mounjaro, which contains a drug (tirzepatide) that helps people with obesity shed body weight by curbing their appetite, has driven up Eli Lilly’s revenue. On Thursday, the pharma company reported $9.5 billion in sales for the third quarter, up 37% compared to the same time a year earlier, as well as a profit of 10 cents per share, beating analyst estimates.
Mounjaro alone crossed a billion in sales for the first time—much of it from America—and is expected to be approved by U.S. regulators as an obesity treatment by the end of this year, Reuters reported.
Novo and Lilly didn’t immediately return Fortune‘s request for comment.
Boom in sales, but not supply
The fact that these companies are in their boom era is no secret—Novo’s shares are up 47% since the start of the year, while Lilly shares have seen a 59% increase.
There’s another thing the two companies have in common: the demand for their drugs aiding weight loss are quickly outpacing supply. Novo and Lilly were faced with questions from analysts on how they are coping with this imbalance.
In the past months, Novo has had to restrict the supply of Wegovy in the U.S. which could continue into 2024. And even in the U.K., where the company’s blockbuster drug debuted in September, supply remains constrained. On Thursday, the company said that the U.S. can expect wider supply next year, although shortages may be likely in the short- to medium-term.
As for Lilly, it’s working on increasing the supply of Mounjaro after a period of limited availability that prompted the U.S. Food and Drug Administration to add it to its list of shortages. All doses of the drug are now listed as available, the company said, according to CNBC. The company is also hoping to double its production capacity for drugs including Mounjaro and Trulicity, which is also used to treat diabetes.
“This is really all hands on deck,” Lilly CEO David Ricks said on the company’s earnings call Thursday. “We’re not at all happy with the capacity we’ve announced already.”
The race is on for both drug-makers as they grapple with ever-increasing demand, competition from players working on GLP-1 drugs (as the class of obesity drugs are called) and the rise of counterfeit versions of their medications. Investors are also keen to see the companies expand their supply to allow new patients, as the weight-loss drug industry is estimated to grow to $100 billion by 2030, according to bank Goldman Sachs’s estimates.
But for now, Novo and Lilly continue to bring in strong top-lines—and for as long as the weight-loss drug frenzy lasts, that might just continue.