Novo pumps $6B into manufacturing to help meet sky-high Wegovy demand
Published: Nov 10, 2023
By Tristan Manalac
Novo Nordisk on Friday announced that it is investing more than $6 billion to boost manufacturing capacity in its home country of Denmark to meet current and future demand for products targeting serious chronic diseases.
The Danish company will start rolling out the investment this year, with an initial $3.6 billion capital tranche and will continue to invest over the next six years. The additional funding will be channeled into facilities in Denmark, where the pharma giant currently has more than 23,000 employees—most of whom work at production sites.
The multibillion-dollar manufacturing boost comes as Novo is struggling to keep up with the staggering demand for its weight-loss medication Wegovy (semaglutide). Manufacturing issues have also hounded the GLP-1 agonist, forcing the company to restrict the U.S. supply of the lower doses of the therapy.
Novo will use the money to construct a new multi-product facility dedicated to the production of active pharmaceutical ingredients (API), including those used for its GLP-1 products. The 170,000-square-meter facility will be equipped with state-of-the-art technologies that are “future-proof” as it will be flexible enough to accommodate future manufacturing processes, the company contends.
According to Henrik Wulff, executive vice president of Novo’s product supply, quality and IT, the $6 billion manufacturing investment highlights the importance of the company’s existing sites as “cornerstones” of its growth and underlines the “belief we have in our current and future product portfolio and its relevance for people living with serious chronic diseases.”
Novo projects that it will employ up to 3,000 external workers for the various construction projects, which the company expects to finalize gradually starting at the end of 2025 through 2029. Once completed and fully equipped, the new facilities will create 800 new jobs, most of which will be in API manufacturing.
While the bulk of the funding will be funneled into API production, some will also be distributed throughout its global value chain including packaging of its pharmaceutical products. The $6 billion manufacturing investment will also mark the 100th anniversary of Novo’s founding in Denmark, according to the company’s announcement.
Novo has more than enough money to bankroll this manufacturing investment. In its third-quarter earnings report, the Danish drugmaker logged nearly $8.4 billion in sales, representing an approximately 38% increase from the same period in 2022 at constant exchange rates.
Wegovy accounted for a considerable portion of this, earning $1.38 billion in the third quarter—growth of more than 730% from the same period the prior year.