Quiver Quantitative - Pharmaceutical giant Eli Lilly (NYSE:LLY) has engaged the services of Switzerland's CordenPharma to manufacture the active component for its diabetes drug, Mounjaro, according to an insider source who spoke to Reuters. This partnership emerges as Eli Lilly gears up for the U.S. release of the type 2 diabetes medication, which will be repurposed as a weight loss drug in response to the skyrocketing demand for obesity treatments. Already prescribed "off-label" by some U.S. physicians for weight loss, Mounjaro's active ingredient, tirzepatide, will be produced at CordenPharma's Colorado facility, although the details of the contract remain confidential. CordenPharma, a contract drugmaker with global operations and backed by private equity, neither confirmed nor denied the arrangement when queried. However, earlier this year, the company did hint at a major agreement regarding the production of a "large volume peptide" at its Colorado site, which is speculated to be linked to this deal.
The burgeoning demand for weight loss pharmaceuticals is providing a substantial impetus to contract development and manufacturing organizations (CDMOs) such as CordenPharma. This trend compensates for the dip in COVID-19 related contracts for these entities. In a parallel move, Novo Nordisk (CSE:NOVOb), a competitor to Eli Lilly, is ramping up the production of its obesity drug, Wegovy, which shares the same therapeutic class as Mounjaro. Both drugs, known as GLP-1 receptor agonists, initially formulated for diabetes treatment, act by delaying digestion and curbing appetite.
With projections placing the potential worth of the obesity drug market at a staggering $100 billion over the forthcoming decade, pharmaceutical companies are keenly capitalizing on this opportunity. A testament to this burgeoning interest is Eli Lilly's soaring market value, which has witnessed a surge of 62.5% this year alone, primarily driven by the high demand for Mounjaro.
As of late, CordenPharma disclosed the successful expansion of its Boulder facility, which will now accommodate an additional 60 staff members. Notably, during the COVID-19 pandemic, this facility was instrumental in supplying Moderna (MRNA) with significant quantities of lipids essential for its vaccine production.
This article was originally published on Quiver Quantitative