Eli Lilly and Co (LLY.US) has made huge investments to expand production capacity. The company has seen initial results and has been able to lift shipping controls implemented in Japan last year.
According to the Zhītōng Cáijīng APP, Eli Lilly and Co (LLY.US) made large investments to expand production capacity for its popular weight loss and diabetes drugs. The company has seen initial results and has been able to lift shipping controls implemented in Japan last year.
Despite being approved for use in diabetes, due to supply shortages, Eli Lilly had to limit the amount of Mounjaro shipped to Japan last year. The drug was also approved in the United States for weight loss under the brand name Zepbound. Speaking in an interview on Thursday, Simone Thomsen, President of Eli Lilly Japan, stated the company has invested a total of 18 billion U.S. dollars since 2020 to continuously increase production capacity. Supply shortages have now been somewhat relaxed. Thomsen said, "When we started production last year in Japan, we had to control part of the shipments. I am happy to inform you that the supply in Japan has now stabilized and such controls have been lifted."
Thomsen said, "In Japan, we had to control some shipment quantities when we started production last year. I'm happy to tell you that the supply in Japan has basically stabilized and these controls have been lifted."
Eli Lilly and competitor Novo Nordisk (NVO.US)'s weight loss drugs are popular worldwide, and the increasing demand has brought ever-growing supply pressure on manufacturers. According to Bloomberg's estimates, by the end of this decade, this demand will lead to a market worth $80 billion. Last week, Goldman Sachs increased its market size expectations to say that the global weight loss drug market could reach $130 billion by 2030.
In Japan, Eli Lilly is investing 7 billion yen ($45 million) to expand production capacity at the Kobe plant. Thomsen said, "We will complete the expansion by the end of this year, and the new model will start production next year."
Last month, in order to solve the ongoing shortage, Eli Lilly also announced an increase in investment in its production base in Lebanon, Indiana, to produce Mounjaro's active ingredient tirzepatide, with new investment reaching $5.3 billion and a total investment of $9 billion.
At the same time as increasing production capacity, the company is limiting the launch of these drugs outside the United States. Eli Lilly has not yet launched Mounjaro for weight loss in Europe, although the drug has been approved for several months. CEO Dave Ricks said the drug was approved earlier in China for treating diabetes, but Eli Lilly "will not launch it."
Eli Lilly is currently seeking approval from Japanese authorities for the drug. Meanwhile, Novo Nordisk's weight loss drug Wegovy has already been approved in Japan.