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Eli Lilly’s Weight-Loss Drug Finally Off FDA Shortage List

The Food and Drug Administration declared an end to the scarcity of Eli Lilly’s highly in-demand weight-loss and diabetes drugs on Thursday.

Photo of an Eli Lilly building
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The decision carried some weight.

The Food and Drug Administration declared an end to the scarcity of Eli Lilly’s highly in-demand weight-loss and diabetes drugs on Thursday. That’s a boon for the pharma giant as it approaches a trillion-dollar valuation — and a hard knock for firms that are selling cheap knock-offs of the compounded drugs.

Weight Off Their Shoulders

The numbers speak for themselves. Over 100 million Americans have obesity, and that jumps to more than a billion globally. There’s a considerable market for Eli Lilly’s weight-loss drug Zepbound and diabetes injection Mounjaro. In August, the company trounced analysts’ expectations, reporting $11.3 billion in revenue and $3 billion in profit against a $10 billion and $2.4 billion FactSet consensus, respectively, in the second quarter.

Much of that was on the strength of Zepbound, which did $1.2 billion in sales, and Mounjaro, which did $3 billion in sales. Rival Novo Nordisk — whose competing drug Wegovy is currently facing a shortage, while its other competing drug Ozempic is available, according to the FDA — missed on forecasts in part because it was struggling to keep up production capacity. Eli Lilly seems poised to avoid that trap:

  • Eli Lilly’s market cap was $884 billion as of Thursday afternoon trading, though its shares traded mostly flat. Hims & Hers Health, which sells a knock-off compounded weight-loss drug, was most impacted by the news that Zepbound and Mounjaro are back in stock: Its shares fell 9.6% Thursday.
  • Eli Lilly’s main problem — keeping up production capacity — got another boost this week. The company said Wednesday it’s spending $4.5 billion on a new production facility for drugs in clinical trials in Indiana, where it’s headquartered.

Stop the Gravy Train: Eli Lilly’s products spent 22 months in shortage, which is what allowed compounders to make cheaper knock-offs under FDA rules. Now that Mounjaro and Zepbound are in stock, they have 60 days to stop. During the shortage period, Hims & Hers revenue soared — a 52% increase in the second quarter — but now it’ll only be able to produce its copycat of Novo Nordisk’s Wegovy. It’ll soon be ejected from the gravy train that is helping people cut back on gravy.