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GLP-1 Manufacturing: Scaling capacity ahead of Semaglutide patent expiry

India’s CDMO ecosystem and innovators are preparing for a multi-fold surge in demand for injectables and oral formulations

We visited the peptide API plant of Biocon (BIOS) and the peptide manufacturing plant of OneSource Specialty Pharma to understand the manufacturing aspects of GLP-1 products:

 * Demand for Semaglutide is expected to reach 50-60 tons after patent expiry in emerging markets compared to the current innovator sales equivalent of 2 tons of API per annum.

* While formulators are procuring API from Chinese sources, they are working on inhouse manufacturing to de-risk the supply. 

* Companies are utilizing multiple business models, such as - a) in-house development/manufacturing and establishing their own front-end across multiple geographies; and b) being a CDMO company for supplying API/formulation  The timely approval is vital for business success, given that the cost of manufacturing is significantly lower than the price of the innovator. 

* The injectable (Wegovy) and the oral solid dosage (Rybelsus) of Semaglutide are expected to witness patent expiry in Mar’26 in India.

* The injectable Semaglutide would have a higher offtake than the oral solid, as the injectable is used for weight management and Type II diabetes control, while the oral solid is primarily used for Type II diabetes.

Key highlights

* The cost of manufacturing the API through the synthetic route (~USD200/g) is higher than that of the biological route (~USD50/g).

* The synthetic route comprises solid phase peptide synthesis (SPPS) with chemical modifications. The biological route comprises fermentation using recombinant DNA technology using engineered microbe, followed by purification and chemical conjugation.

* Synthesis is typically a 21-day process for a batch. The critical aspect in the process is stabilizing the addition of amino acids and maintaining impurities within the permissible limit.

* API developers/manufacturers are using the synthetic route due to higher control over purity and sequence accuracy. The synthetic route also has flexibility to incorporate unnatural amino acids/modification (Lipidation with C18 fatty acid chain).

*  Having said this, the synthetic route also has challenges. For example, it is expensive to scale up beyond 10kg of Semaglutide per batch, and the purification is solvent and energy-intensive.

*  The challenges in the biological route include the appropriate folding of peptide and the prevention of degradation in host cell. Chemical modification (Lipid conjugation) still needed after biological production.

* Regulatory complexity is higher in the biological route vs. the synthetic route as it may need to be developed and filed under the BLA route with the USFDA.

* The difference between Semaglutide and Liraglutide is one amino acid. This becomes a significant factor for better efficacy as well. Most of the generic applications are filed using Chinese API as source.

* Having said this, BIOS has set up its own API/formulation manufacturing and has made the process efficient to lower the cost compared to Chinese suppliers. 

* Notably, the capacity of BIOS would be suitable to cater to business for the next 2-3 years.

* BIOS expects to file soon in Canada (Ozempic and Wegovy), and expects its approval in 2HCY26. Given that no GLP-1 generic has been approved so far by Health Canada, including Liraglutide, we believe that there could be a downside risk to the projected Semaglutide approval timeline for BIOS in Canada.

* Almost 25 customer inspections are being done at Unit II (drug device combination) of OneSource.

* OneSource manufactures drug product, drug substance and drug device combination at Unit II. While Semaglutide API is not manufactured at this site, the rest of the process to make Semaglutide injectable is done at Unit II. In addition, OneSource is utilizing this facility to manufacture biosimilars and innovative biologics.

* OneSource has strengthened its position in GLP-1, with more than 20 customers tied up till date.

* The CDMO market opportunity in GLP-1 is expected to increase at 20%+ CAGR to USD12b by FY28. The biologics CDMO opportunity is expected to increase at 14% CAGR to USD38b by FY28.

*  OneSource’s facility features a Bausch + Ströbel filling line integrated with isolator technology to deliver high-precision cartridge and PFS fill finish.

* The capacity is expected to scale up from 40m units currently to 100m units in FY27 and 200m units from FY28 onward.

* Customers of OneSource would be catering to emerging and developed markets.

* OneSource has capacity tie-ups with customers in multiple aspects. Some customers have a tie-up in the capex program, some have take-or-pay contracts, and some have given reservation fee with a long-term forecast.

* Canada, Brazil and India markets are opportunities for OneSource customers over the near term. Other countries (~60-80) are expected to witness patent expiries from CY26 onward, driving opportunities for CDMO companies like OneSource. 

*OneSource has drug-device combination manufacturing capability for non-GLP as well as GLP products. Overall ~10 products are in the pipeline in the drugdevice combination.

* OneSource has site approval for the Brazil market. It is awaiting customer approval to manufacture products for this market.

* Interestingly, with EU and USFDA approvals for its site, the Canadian health authority would not require inspection for product approval.

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