In a bid to meet escalating demand for its obesity drugs, pharmaceutical behemoth, Eli Lilly & Co. LLY has funneled $800 million into its Irish operations to ramp up the production of its blockbuster drugs, Mounjaro and Zepbound.
What Happened: The investment is aimed at ensuring a steady supply of the drugs, which have been grappling with shortages since 2022. The facility, situated near the town of Kinsale in County Cork, Ireland, will manufacture tirzepatide, the key ingredient in these injectable medicines, Bloomberg reported on Thursday.
The decision comes in the wake of the U.S. government’s stringent measures against Chinese biotech firms, a significant contributor to the global pharmaceutical supply chain.
The company has embraced a hybrid manufacturing strategy that enhances output while mitigating the complexities of delicate peptide production. The plant was recently dubbed a "Facility of the Year" by the International Society for Pharmaceutical Engineering for its innovative approach.
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Since 2020, Lilly has been steadily increasing its production capacity, pouring over $17 billion into the creation of new plants and expansion of existing facilities for its weight-loss and diabetes drugs. The company has also initiated the construction of production capacity for its next-generation weight-loss medicines, which are currently in clinical trials.
Why It Matters: Eli Lilly’s investment in its Irish operations comes amidst a mixed outlook from 28 analysts, with an average 12-month price target of $964.46 for the company’s stock. The company has been battling imitation versions of Mounjaro and Zepbound, launching discounted products to counter off-brand versions.
The company’s second-quarter results, driven by the popularity of Mounjaro and Zepbound, surpassed estimates, with revenue rising nearly 36% to $11.30 billion. The company’s commitment to boosting production capacity underscores its leading position in the lucrative weight loss field.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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