West Pharma lifts profit outlook as GLP-1 drug boom drives injectable components demand

West Pharmaceutical Services (WST) raised its annual profit and revenue forecasts after strong demand for components used in injectable drugs — including treatments for diabetes and obesity — helped the company beat second-quarter estimates, sending its shares up nearly 6 percent in morning trading.

The Pennsylvania-based company, which manufactures stoppers, plungers and delivery systems used to package and administer vaccines, biologics and other injectable therapies, has been a significant beneficiary of the surge in demand for GLP-1 drugs such as Novo Nordisk's (NVO) Ozempic and Wegovy and Eli Lilly's (LLY) Mounjaro, all of which rely on injection pens to deliver treatment.

Chief executive Eric Green said that generic GLP-1 drugs, particularly in Asia, are emerging as an additional growth opportunity, with demand in China, India and South Korea helping drive strong regional growth in the second quarter. Chief financial officer Bob McMahon added that both GLP-1 and non-GLP-1 high-value product components are now expected to grow at a high-teens rate this year, underscoring the breadth of the demand recovery.

West Pharma reported second-quarter adjusted earnings per share of $2.37, comfortably ahead of the analyst consensus estimate of $2.08, according to LSEG data. The company raised its full-year adjusted earnings per share guidance to a range of $8.85 to $9.05, up from its prior outlook of $8.40 to $8.75, and lifted its annual revenue forecast to between $3.35 billion and $3.38 billion, compared with the previous range of $3.295 billion to $3.35 billion.

David Windley, an analyst at Jefferies, said the revised guidance suggests management is taking a conservative approach and leaving room for future upside.