(Bloomberg) -- Eli Lilly & Co. expects its blockbuster weight-loss drug to officially come out of shortage in the US in the coming days, the company’s chief executive officer said, threatening the billion-dollar industry of copycat versions of the in-demand drugs.
Lilly’s drug, sold for weight loss as Zepbound, will cease to be in shortage “very soon,” CEO David Ricks said in an interview in Paris on Thursday. “I think actually today or tomorrow we plan to exit that process.”
Multiple dosages of the drug, also marketed for diabetes under the brand name Mounjaro, have been on the Food and Drug Administration’s shortage list since late 2022, allowing pharmacies to sell what are known as “compounded” versions. Novo Nordisk A/S’s competing drug Wegovy remains on the FDA list.
The FDA ultimately decides when a medication is no longer in shortage, based on information provided by drug companies. The agency declined to comment on the timing of Zepbound being removed from the shortage list. A Lilly spokesperson said in an email that the company is working with the FDA to provide updates on the drug’s availability and that supply is “dynamic.”
An end to the shortage has the potential to impact the billion-dollar market for weight-loss drugs manufactured at compounding pharmacies, which are not reviewed by health authorities for safety and effectiveness in the same way that brand-name prescription drugs are. Telehealth companies including Eden and Henry Meds advertise compounded versions of Zepbound on their websites.
Shares of Hims & Hers Health Inc., which sells a compounded version of Wegovy but not Zepbound, fell as much as 16%, the most in more than three years, on Ricks’ comments. The potential end of Zepbound’s shortage “signals that the GLP-1 benefit Hims is currently experiencing could be more short-lived than originally thought,” Piper Sandler analyst Korinne Wolfmeyer wrote in a note to investors.
Eli Lilly shares rose 3.1% on Thursday, bolstered by a study showing that Zepbound improved the long-term health of patients with obesity-related heart failure. The stock has gained about 42% so far this year, triple the advance of the S&P 500 Index.
The FDA’s shortage list says two doses of Lilly’s drug used for weight loss and two doses for diabetes are only available in limited quantities through July. The shortage of Novo’s Wegovy is listed as indefinite.
Prior to the prescription weight-loss boom, drug compounding was largely reserved for hospitals and patients who needed bespoke medications for reasons such as avoiding allergens. The FDA has long allowed the practice, but companies including Lilly and Novo have started suing compounders and other companies advertising their drugs, citing marketing and quality problems.
--With assistance from Ike Swetlitz.
(Updates stock move and adds the FDA declined to comment and response from Eli Lilly.)
©2024 Bloomberg L.P.