J.P. Morgan Losing Weight

Hennessy,Mike;

J.P. Morgan Losing Weight

Published on: February 2, 2024

Pharmaceutical Technology, Pharmaceutical Technology, February 2024, Volume 48, Issue 2

Pages: 10

Given its positioning at each new year’s commencement, the J.P. Morgan Healthcare conference helps establish the tone with which the pharmaceutical industry is viewed.

Given its positioning at each new year’s commencement, the J.P. Morgan Healthcare conference helps establish the tone with which the pharmaceutical industry is viewed. It is rare for major new announcements to be made at the conference; rather, its prominence is due to its capacity to sum up and condense the lessons learned from the past year’s fray.

As such, both Lisa Gill, senior analyst covering Health Care Services, and Chris Schott, senior analyst at J.P. Morgan covering US Diversified Biopharma, emphasize the salience of the current generation of weight loss drugs. Schott stated that, from an investment perspective, due to pharmaceuticals underperforming in 2023, “investor sentiment is pretty bearish for 2024 … as [the sector] is a well-positioned group, at record low valuations” (1). Schott goes on to say, “the GLP-1 weight loss drugs are projected to hit $100 billion in prescription sales by early 2030s, making it the largest therapeutic market we’ve ever seen, … and to alleviated bottlenecks, production capacity is expected to double in 2024, and rise again by 50% in 2025” (1).

While recaps are certainly useful, it is salutary to point out Pharmaceutical Technology was investigating GLP-1 performance in 2022, and asking, are obesity drugs the next blockbusters? Marina Necdina pointed out, “Novo had to revamp its production due to high demand for Semaglutide and some setbacks with manufacturing facilities. Overall, reliable API suppliers and contract manufacturing organizations (CMOs) are key factors in market success. Indeed, to solve such potential manufacturing obstacles, many companies opt to build in-house capabilities instead of relying on CMOs. Novo decided to build three new manufacturing facilities. This step will increase manufacture of its APIs, while also being able to assemble and package the oral and injectable products.” Necdina further emphasized potential production bottlenecks saying, “Eli Lily, a new potential player in obesity market, seems to understand manufacturing challenges. They plan to expand manufacturing footprint in Indiana by investing $2.1 billion in two new manufacturing sites” (2).

References

Gill, L; and Schott, C. 42nd Annual J.P. Morgan Healthcare Conference, J.P. Morgan Health Events website, https://www.jpmorgan.com/about-us/events-conferences/health-care-conference (accessed Jan. 16, 2024).