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Novo Nordisk is investing $4.1bn to expand its US manufacturing and boost production of its blockbuster weight-loss drugs to meet surging demand.
The Danish pharma group said on Monday that the investment will fund a new 1.4mn sq ft manufacturing plant on a site near Raleigh, North Carolina, doubling its size. The extra capacity will come online between 2027 and 2029.
The investment comes as Novo Nordisk competes with rival Eli Lilly for a larger share of the market for a new class of diabetes and weight loss drugs, known as GLP-1s, which is already set to generate $42bn in sales this year and is projected to reach as much as $130bn by 2030.
Both Novo Nordisk’s Wegovy weight loss drug and its Ozempic diabetes treatment, as well as Eli Lilly’s rival Zepbound and Mounjaro medicines have been hit by shortages in recent months, according to the US Food and Drug Administration.
Both companies have spent billions of dollars to increase production of their drugs, which are self administered with an injection pen. Novo Nordisk this year agreed to pay $11bn for three “fill and finish” sites owned by Catalent, as part of a deal between the US contract drug manufacturer and Novo Nordisk’s parent company Novo Holdings.
As part of the “fill and finish” process, drugs are formulated before being filtered into syringes.
Including the latest investment, Novo Nordisk has committed $6.8bn this year to boost its own in-house production capacity. Last year, it announced plans to spend $6.5bn on a new Danish manufacturing site to increase production of semaglutide, the active ingredient used in its weight loss drugs.
Eli Lilly last month announced plans to spend $5.3bn on a manufacturing site to make tirzepatide, the compound behind its weight loss drugs, in its home state of Indiana. Since 2020, Eli Lilly has spent $18bn on building manufacturing operations across five sites in the US and Europe.
Lars Fruergaard Jørgensen, Novo Nordisk’s chief executive, said the investment was “yet another real signal of our efforts to scale up our production to meet the growing global need for our life-changing medicines”. The North Carolina facility will also help produce drugs targeting other chronic diseases.
Novo Nordisk has enough “fill and finish” capacity to manufacture roughly 850mn of the injectable pens for all of its diabetes and weight loss drugs this year, according to industry estimates seen by the Financial Times.
Booming demand for weight loss drugs has made Novo Nordisk Europe’s most valuable company, with a market capitalisation of $636bn as of Monday afternoon.
The new manufacturing site, located in the North Carolina town of Clayton, will create 1,000 new jobs in addition to the 2,500 people who already work for the group in the area. Novo Nordisk has had a presence in Clayton since 1993.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
