Novo Nordisk invests US$6 billion to address obesity drug shortages and global demand

DENMARK — In a strategic move to address the surging global demand for its anti-obesity drug, Wegovy, Novo Nordisk announced a substantial investment of US$6 billion to bolster production in Denmark.

The company, facing challenges related to shortages that compelled patient limitations access to Wegovy, aims to significantly enhance its manufacturing capabilities.

Despite its recent achievements, the pharmaceutical giant’s CEO, Lars Fruergaard Jorgensen, cautioned that the industry is still far from meeting the global demand for weight-loss drugs.

The prevalence of obesity, recognized as a significant health risk globally, has nearly tripled since 1975, making it the fifth-leading risk factor for primary causes of death, according to the World Health Organization (WHO).

Obesity rates are projected to continue rising, with the World Obesity Atlas 2023 forecasting that over half of the global population will be overweight or obese by 2035.

CEO Jorgensen acknowledged the persistent demand challenges, stating, “With the capacity we’re building and what competition is building, I believe we are far from getting to a billion people. I believe we will continuously have to invest.”

This week, regulatory approvals for Eli Lilly’s weight-loss treatment and AstraZeneca’s investment in licensing an experimental pill from China’s Eccogene have highlighted the intensifying competition in the obesity drug market.

Analysts anticipate that enormous demand could propel annual sales of obesity drugs to US$100 billion within a decade, with up to 10 different drugs available.

Novo Nordisk’s US$6 billion investment will primarily focus on expanding its Kalundborg site in Denmark, aiming to boost capacity for manufacturing active pharmaceutical ingredients (API) and various aspects of its supply chain, including packaging.

This expansion includes increasing capacity for GLP-1 products like semaglutide, the API in Wegovy, and the company’s diabetes treatment, Ozempic.

While acknowledging that the market may be overestimating its ability to deliver forecasted numbers, Jorgensen emphasized that the investment extends beyond API production.

Novo Nordisk also plans to allocate resources to expand capacity for filling injection pens used for Wegovy and Ozempic, a process known as fill-finish.

Novo Nordisk’s significant investment marks the largest by private sector company in Denmark. The construction projects are slated for completion from late 2025 through 2029.

Global landscape of obesity medications

The pharmaceutical industry is witnessing a surge in the development and approval of obesity treatments. Recent approvals by U.S. and British regulators for Eli Lilly’s weight-loss treatment highlight the intensifying competition.

AstraZeneca’s investment in licensing an experimental pill from China’s Eccogene further underscores the industry’s focus on this therapeutic area.

Market analysts anticipate that the enormous demand for obesity drugs could drive annual sales to reach US$100 billion within the next decade, with potentially up to 10 different drugs entering the market.

Jorgensen welcomed competition, stating that Eli Lilly’s recent approval “will further fuel market growth.”

As Novo Nordisk races to expand production and fulfill its projections of double-digit sales growth for Wegovy and Ozempic, the pharmaceutical giant is poised to play a pivotal role in addressing the evolving landscape of the global obesity market.

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