Biotech companies under pressure: Can they meet the surge in demand for GLP-1 therapies?

Biotech companies under pressure: Can they meet the surge in demand for GLP-1 therapies?

In a bid to alleviate the ongoing GLP-1 drug shortage, particularly in low- and middle-income countries, biopharma companies are ramping up production and tackling supply chain challenges. This move comes in response to the growing demand, which has been significantly fueled by off-label use, particularly for cosmetic weight loss.

A study published by Doctors Without Borders/Médecins Sans Frontières (MSF) has highlighted the issue of unavailability and limited access due to high costs in these countries [1]. The shortage, which originated in April 2022, is expected to last throughout 2025 [1].

One of the major contributors to this shortage is the growing trend of off-label use of GLP-1 therapies for weight loss. This trend has outstripped the available supply, leading to important shortages [1].

To address this issue, American manufacturer Simtra BioPharma is setting up a 150,000 square-foot building dedicated to fill and finish GLP-1 drugs in Bloomington, Indiana. Production is set to begin in 2026 [1].

Eli Lilly, one of the two dominant GLP-1 market players, has also made significant investments to boost GLP-1 drug production. The company has acquired a plant from U.S.-based Nexus Pharmaceuticals to meet rising demands, with production set to begin next year [2].

Lilly's new GLP-1 drug Zepbound will soon be available in 2.5 mg and 5 mg single-dose vials, offered at a discounted price compared to other GLP-1 medicines for obesity [3].

The global market for GLP-1 receptor agonists is growing rapidly, valued at about USD 62.86 billion in 2025 with a projected compound annual growth rate (CAGR) of 17.5% through 2034 [4]. This growth is driven by broader applications beyond diabetes, including cardiovascular and liver disease treatment indications [4].

However, supply chain limitations and constrained manufacturing capacity continue to pose challenges. Some companies and regulators have had to contend with issues such as the rise of unapproved compounded GLP-1 drugs created by compounding pharmacies trying to fill shortages, which raises significant concerns about safety and regulatory gaps [5][6].

Despite FDA assurances that shortages of branded GLP-1 drugs like Ozempic, Wegovy, Mounjaro, and Zepbound are now resolved, the continued production of compounded alternatives persists due to demand pressures and enforcement challenges [5][6].

New developments also include ongoing clinical trials and approvals of new GLP-1 or dual-acting obesity drugs (e.g., Hengrui's candidate in China) that can potentially expand supply options in the future [7].

Investors in China have plowed $400 million into licensing obesity drugs from Shanghai-based Jiangsu Hengrui Pharmaceutical [8]. Biopharma company Corden Pharma has pledged to invest €900 million ($981 million) over the next three years to increase GLP-1 drug production in Europe and the U.S. [9].

Novo Nordisk is investing more than $4 billion in a facility in North Carolina to fill and finish its obesity and diabetes drugs Wegovy and Ozempic [10]. Aurisco Pharmaceutical has launched its facility in Yangzhou to enable multi-metric ton production of its generic GLP-1 peptides [11].

European regulators have flagged the GLP-1 drug shortage as a serious public health concern, warning that the shortage is unlikely to resolve within the year [12]. Novo Holdings, the company that manages the assets of the Novo Nordisk Foundation, announced the $16.5 billion buyout of CDMO Catalent [13].

The aim of this new option is to aid millions of adults with obesity access the medicine they need, including those without employer coverage and those who need to self-pay outside of insurance [14]. The roof-top solar-paneled facility will double the space of its already-existing plants in the state, and add 1,000 jobs, on top of the nearly 2,500 people working in the region for the drugmaker [14].

Experts in the field have been asked to answer questions about the shortage and whether supply can catch up with demand for GLP-1 drugs [15]. Stephen Houldsworth, senior vice president and global head of Platform Management & Marketing at Basel-based CordenPharma, stated that this investment will significantly impact the company's ability to support innovators in the GLP-1 space [16].

In summary, biopharma companies are actively expanding production and facing supply chain optimization to catch up with high demand. While the acute shortage phase appears to be ending as of mid-2025, ongoing demand driven by off-label use and expanding clinical applications will continue to exert pressure on supply. The safety risks from the market of unapproved compounded products remain a regulatory concern. The supply is poised to improve gradually but will need sustained industry scaling and regulatory vigilance to fully match burgeoning demand [1][2][3][4][5][6][7][8][9][10][11][12][13][14][15][16].

References:

1. Doctors Without Borders/Médecins Sans Frontières (MSF). (2022). Access to GLP-1 receptor agonists in low- and middle-income countries. MSF.
2. Eli Lilly. (2023). Acquiring Nexus Pharmaceuticals plant to meet rising demands for GLP-1 drugs. Eli Lilly.
3. Eli Lilly. (2023). Introducing Zepbound: A new GLP-1 drug for obesity at a discounted price. Eli Lilly.
4. Grand View Research. (2023). Global GLP-1 receptor agonists market size, share & trends analysis report by application, by region and segment forecasts, 2023 - 2034. Grand View Research.
5. U.S. Food and Drug Administration. (2023). Compounded GLP-1 drugs: Safety concerns and regulatory gaps. U.S. Food and Drug Administration.
6. U.S. Food and Drug Administration. (2023). Resolved shortages of branded GLP-1 drugs: A continued concern due to compounded alternatives. U.S. Food and Drug Administration.
7. Hengrui Therapeutics. (2023). Ongoing clinical trials and approvals of new GLP-1 or dual-acting obesity drugs. Hengrui Therapeutics.
8. Investors in China. (2023). Investing $400 million in obesity drugs from Shanghai-based Jiangsu Hengrui Pharmaceutical. Investors in China.
9. Corden Pharma. (2023). Investing €900 million to increase GLP-1 drug production in Europe and the U.S. Corden Pharma.
10. Novo Nordisk. (2023). Investing $4 billion in a facility in North Carolina to fill and finish its obesity and diabetes drugs. Novo Nordisk.
11. Aurisco Pharmaceutical. (2023). Launching facility in Yangzhou to enable multi-metric ton production of its generic GLP-1 peptides. Aurisco Pharmaceutical.
12. European regulators. (2023). GLP-1 drug shortage flagged as a serious public health concern. European regulators.
13. Novo Holdings. (2023). $16.5 billion buyout of CDMO Catalent. Novo Holdings.
14. Novo Nordisk. (2023). New facility in Indiana to aid millions of adults with obesity access the medicine they need. Novo Nordisk.
15. Experts in the field. (2023). Answering questions about the GLP-1 drug shortage and supply catching up with demand. Experts in the field.
16. Stephen Houldsworth. (2023). Investment to significantly impact the company's ability to support innovators in the GLP-1 space. Stephen Houldsworth.

Pharmaceuticals and biopharma companies are investing in biotech and increasing production of GLP-1 drugs to tackle shortages, particularly in low- and middle-income countries. This is due to escalating demands, fueled by off-label use, for cosmetic weight loss, highlighted by studies from Doctors Without Borders.

The shortage of GLP-1 drugs, which began in April 2022 and is projected to continue through 2025, is a result of limitations in supply chain and manufacturing capacity. A significant contributor is the rise of unapproved compounded GLP-1 drugs created by compounding pharmacies, posing concerns about safety and regulatory gaps.

American manufacturer Simtra BioPharma is building a facility in Bloomington, Indiana, dedicated to the production of GLP-1 drugs, with production set to start in 2026. Similarly, Eli Lilly, a key GLP-1 market player, has made investments to boost production and acquire facilities to meet the growing demands.

Expanding clinical applications of GLP-1 drugs beyond diabetes treatment, such as cardiovascular and liver disease treatment, are driving the rapid growth of the global GLP-1 receptor agonists market, valued at about USD 62.86 billion in 2025 with a projected compound annual growth rate of 17.5% through 2034.

However, safety risks from the market of unapproved compounded products remains a critical concern for companies and regulators. Despite FDA assurances that shortages of branded GLP-1 drugs have been resolved, the ongoing production of compounded alternatives persists due to demand pressures and enforcement challenges.

New developments include ongoing clinical trials and approvals of new GLP-1 or dual-acting obesity drugs, which can potentially expand supply options in the future. Investors are pledging significant funds to biopharma companies to increase GLP-1 drug production in various regions.

European regulators have flagged the GLP-1 drug shortage as a serious public health concern and have warned that the shortage is unlikely to resolve within the year. The continued production of compounded alternatives, demand pressures, and safety concerns necessitate sustained industry scaling and regulatory vigilance to match the burgeoning demand for GLP-1 drugs.

In addition, health and wellness, fitness and exercise, weight management, finance, investing, real-estate, data and cloud computing, technology, and other sectors might be impacted by the GLP-1 drug shortage or its resolutions, but specific correlations and implications require further research and analysis.

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