The cost of making Orforglipron

There is a lot of excitement 🤑 in the biotech and pharma world around Eli Lilly and Company's oral, "small" molecule GLP-1R agonist, Orforglipron, licensed in 2018 from Chinese biotech Chugai Pharmaceutical Co., Ltd., after the readout of one of its Type 2 diabetes Phase 3 trials (link). That the sudy readout happened one week after Pfizer discontinued studies of its own small molecule GLP-1RA, danuglipron, due to suspected drug-induced liver injury, is cementing the quasi-mythical status of Eli Lilly and its CEO Dave Ricks ⚡. We have to wait for the additional Phase 3 trials to confirm orforglipron's acceptable safety profile, but it looks pretty promising.

Among small molecule and peptide experts (and I am not one 😵‍💫 ), the complexity of the molecule represents a tantalizing challenge (link) to streamline its synthesis, which comprises 28-30 steps according to various publications. Which gets us to the question of cost: not how Lilly will price the drug (as high as they can get away with) but how much it actually costs to produce and deliver the product to the patient. Here, obviously, a small molecule pill has lots of advantages over injectables, not to mention that patients usually like pills better than needles. The added cost of refrigeration, vials, injectors, etc, accounts for around 60% of total costs (please let me know if I am wrong in the comments).

With that in mind, it is still possible to compare the contribution of API costs to total cost. Connor Thomson has an interesting back-of-the-envelope calculation, a useful starting point (link): a very comparable API cost per patient per year to Lilly's blockbuster tirzepatide (Mounjaro, Zepbound) or upcoming retatrutide. Add in the other injectables cost and you get a drug that costs about half of what it costs to deliver tirzepatide. That's nothing to sneer at, but then tirzepatide is a double agonist (GLP-1R, GIPR) and retatrutide is a triple agonist (tirzepatide + glucagon receptor).

All we need is a ballpark estimate to draw a broader conclusion, with the caveat that Lilly may have innovated significantly on the synthesis side according to a TIME magazine article (link), from which the picture is borrowed. But even if Lilly is able to reduce the API cost drastically, the complexity of synthesis leads to the following conclusion: although I am sure this oral small molecule will be a mega-blockbuster, it won't be the cheap solution to solve T2D worldwide.

Time to come up with alternatives.