Novo Nordisk’s Wegovy and Eli Lilly’s Mounjaro drove blockbuster sales in the third quarter and the sky’s the limit for the duopoly. The only limiting factor is that the frenzied demand for their respective drugs is outpacing supply.
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In the pharma industry, there are blockbuster drugs and—for the truly fortunate companies—mega blockbusters. However, Novo Nordisk’s Wegovy and Eli Lilly’s Mounjaro are in a category all to themselves, which is confounding analysts trying to get a handle on their potential market size amid the frenzied demand for these weight-loss medicines.
Goldman Sachs analysts forecast that the obesity drug market could reach $100 billion, with the Novo-Lilly duopoly capturing about 80% of the market share by 2030. However, Guggenheim analyst Seamus Fernandez predicts that the total addressable market for GLP-1 drugs like Wegovy and Ozempic could range from $150 billion to $200 billion. These drugs give new meaning to Buzz Lightyear’s famous catchphrase in the Toy Story movies: “To Infinity and Beyond!”
This week, we got a taste of how explosive demand for these drugs is and how difficult it is to forecast. Riding the wave of skyrocketing Wegovy and Ozempic sales, Novo on Thursday raised its sales and operating profit outlook for the rest of the year as part of its third-quarter earnings announcement. In the quarter, Wegovy brought in nearly $1.38 billion in revenue, a whopping 730% spike from the same period in 2022.
Not to be outdone, Lilly’s injectable type 2 diabetes drug Mounjaro—currently used off-label for weight loss and awaiting FDA approval for obesity—captured $1.4 billion in the third quarter, up from $980 million the previous quarter and well above the $1.2 billion consensus estimate from analysts.
Is there anything that could put a damper on this weight-loss drug juggernaut? Well, yes, the market forces of supply and demand.
Given strong demand for Mounjaro, Lilly CFO Anat Ashkenazi told investors on Thursday that the company continued to “experience tight supply throughout most of Q3, which impacted results for the quarter.” And, while supply constraints have eased in the U.S., Mounjaro supply is tight in other parts of the world “which materially impacted performance in these regions,” with demand expected to remain high.
Asked about Wegovy supply going into 2024, Novo Nordisk CFO Karsten Munk Knudsen told investors on Thursday that next year the company “will be delivering significant step-up in volumes” to the U.S. market compared to 2023. Nonetheless, CEO Lars Fruergaard Jørgensen on a media call Thursday provided a more sober assessment, saying that “underlying demand will continue to outpace supply in the short to medium term.”
Greg Slabodkin is the News Editor at BioSpace. You can reach him at greg.slabodkin@biospace.com. Follow him on LinkedIn.
