By Maggie Fick
LONDON (Reuters) – Eli Lilly has hired Switzerland-based contract drugmaker CordenPharma to produce the active ingredient in its diabetes drug Mounjaro, a source familiar with the matter told Reuters on Thursday.
The move to hire CordenPharma comes as the U.S. drugmaker prepares to launch the type 2 diabetes medicine for weight loss in the United States amid exploding demand for obesity drugs.
Lilly has said it expects U.S. approval for Mounjaro for weight loss by the end of the year. U.S. doctors are already prescribing it “off-label” for people wanting to shed pounds.
The source told Reuters that CordenPharma’s factory in Colorado is under contract to make tirzepatide, the active ingredient in the weekly injection. The source declined to be identified because the contract is confidential.
A spokesperson for CordenPharma, which is owned by private equity and headquartered in Basel with 12 manufacturing sites in Europe and the United States, declined to comment. Lilly did not immediately respond to a request for comment.
CordenPharma in January announced it had signed a multi-year agreement for contract manufacturing of a “large volume peptide” at its site in Boulder, Colorado, which could potentially be worth about $1 billion. It has not identified the client.
The deal is the latest example of how the booming market for weight-loss drugs is giving contract development and manufacturing organisations (CDMOs) like Corden a big boost, offsetting the loss of COVID-19 contracts.
Lilly rival Novo Nordisk is spending billions to increase production of its widely used obesity drug Wegovy, which belongs to the same drug class as Mounjaro, as demand outstrips supply.
Eli Lilly recently told Reuters it too was increasing internal capacity of Mounjaro, but for now is using an “extensive portfolio” of CDMOs, without naming them.
Both medicines are GLP-1 receptor agonists, which were originally developed for diabetes. They slow digestion and reduce hunger, causing people taking them to eat less.
Analysts estimate the obesity market could be worth as much as $100 billion in the next decade.
Lilly, now the world’s most valuable healthcare company by market capitalization, has seen it shares rise 62.5% this year as demand surged for Mounjaro.
In September, Corden said it had finished the upgrade and expansion of its Boulder plant following the January agreement.
It has more than 500 staff there and expects to add another 60, it said in the statement last month, without giving a timeline.
During the pandemic, CordenPharma supplied Moderna with large volumes of lipids used to produce its COVID vaccine.
(Reporting by Maggie Fick; Editing by Josephine Mason and Bill Berkrot)
