Weight-Loss Drug Deals Expected to Drive Approximately 4% of Gerresheimer's Annual Growth

Dietmar Siemssen, CEO of Gerresheimer, indicated that agreements to supply manufacturers of medications for weight loss and diabetes with vials, cartridges, syringes and autoinjectors are projected to account for approximately 4% of the company's annual revenue growth. 

As reported in February 2022, Gerresheimer expects to achieve average annual growth of 10%. Nearly half of this growth is anticipated to result from involvement with drugs in the GLP-1 class, according to the CEO. Novo Nordisk's popular obesity drug Wegovy and Eli Lilly's in-demand Zepbound are GLP-1 medications. 

Siemssen stated sales tied to GLP-1 medicines are forecast to surpass 100 million euros in 2022 and reach at least 350 million euros (approximately $379 million) within the next three years based on actual contracts and orders. "We are only at the beginning of ramping up production to meet the total market demand for these drugs, with the most substantial growth expected between 2025 and 2027," he said. 

Two analysts estimated Wegovy average sales of approximately $8.6 billion in 2022 and $12.86 billion in 2025. They projected Zepbound sales of around $4 billion in 2022 and $10.8 billion in 2023. Originally developed for type 2 diabetes, GLP-1s also reduce food cravings and cause the stomach to empty more slowly.

 Analysts see the weight-loss drug market achieving a value of at least $100 billion by the end of the decade as consumers increasingly use Wegovy and Zepbound, which have demonstrated weight reduction of up to 20%, and other medicines in development.

 Gerresheimer manufactures injection pens to administer the medications for Novo Nordisk and Eli Lilly, according to a 2021 JPMorgan report. Gerresheimer confirmed its dual-chamber syringe would be utilized by Novo Nordisk for its experimental obesity drug cagrisema, per a March 2022 Jefferies note.

 Gerresheimer currently produces products for GLP-1 medications in Germany and is ramping up a plant in Mexico that will also be used for this purpose, Siemssen stated. "The Mexican plant will not only host GLP-1 products but will be our key facility for the North American markets," he added. The company manufactures pens for GLP-1 drugs as well as other medicines in the Czech Republic, South America, and the U.S. and will produce them in China in the future, according to the CEO. A new facility in the U.S. will begin manufacturing products potentially applicable to GLP-1 drugs in fall 2025, he further noted.

 Brazil is the sole South American country where Gerresheimer manufactures, as per the company website. In 2021, Gerresheimer recorded 1.99 billion euros in sales and anticipates revenue growth of 5-10% in 2022 and 10-15% in 2025. At minimum two competitors, one being obesity drug cartridge supplier Schott Pharma, are projected to increase over 9% in 2022.

 Key companies producing components for self-injectable medications include West Pharmaceuticals, Ypsomed, and Gerresheimer, according to an August 2022 Bernstein research report. In September 2022, Ypsomed stated it signed a long-term supply agreement with Novo Nordisk for autoinjectors.