$4.1 Billion Expansion to Meet Growing Demand
Danish pharmaceutical giant Novo Nordisk has unveiled a $4.1 billion (€3.8 billion) investment plan to expand its manufacturing capacity in the United States. The new facility in Clayton, North Carolina, will serve as a second fill and finishing plant for the highly sought-after weight loss drugs Wegovy and Ozempic. This expansion is part of Novo Nordisk’s broader strategy to bolster its global manufacturing network. According to the company, this will be one of the largest manufacturing investments in its history, adding 1.4 million square feet of production space dedicated to aseptic manufacturing and finished production processes.
Job Creation and Construction Timeline
Early-stage work has commenced on the 56-acre facility, with construction anticipated to be completed between 2027 and 2029. The new plant is expected to create 1,000 new jobs, supplementing the 2,500 employees already working at Novo Nordisk’s three existing sites in North Carolina. The company’s increased investment from $3.9 billion (€3.6 billion) last year to approximately $6.8 billion (€6.3 billion) this year underscores its commitment to scaling up production to meet rising demand.
Rising Demand for Weight-Loss Drugs
Supply Struggles to Keep Up
Wegovy and Ozempic, known for their effectiveness in treating weight loss and diabetes, are part of a drug class called glucagon-like peptide-1 (GLP-1) agonists. Demand for these medications has surged, with 35,000 new patients in the US starting Wegovy recently, up from 25,000 in May. Despite efforts to increase supply, the US Food & Drug Administration (FDA) reports that Wegovy remains limited due to high demand, while Ozempic is still available for injection.
Competitive Landscape and Market Impact
Eli Lilly, Novo Nordisk’s main competitor, also announced a significant investment of $5.3 billion (€4.9 billion) in Indiana to boost the production of its type 2 diabetes drugs, Zepbound and Mounjaro. This brings Eli Lilly’s total investment to $9 billion (€8.4 billion), the largest in its 150-year history. The booming market for weight-loss drugs has driven the shares of both companies to all-time highs.
Financial Performance and Future Outlook
Sales and Profit Surge in Q1
Novo Nordisk’s share price has increased by 42% this year due to the growing demand for Wegovy. In the first quarter, the company doubled its sales of weight-loss drugs to €125.7 billion, with profits rising 28% to €3.4 billion. US revenue jumped 35%, with weekly prescriptions for Wegovy reaching 130,000. The company has raised its sales growth outlook for 2024 to between 19% and 27% at constant exchange rates.
Strategic Acquisitions and Market Leadership
In September 2023, Novo Nordisk surpassed French luxury giant LVMH to become Europe’s most valuable company, driven by the success of Wegovy and Ozempic. In a strategic move, Novo Holdings, the parent company of Novo Nordisk, acquired syringe maker Catalent for $16.5 billion (€15.4 billion) in February. This acquisition, including the purchase of three Catalent fill-finish sites for $11 billion (€10.2 billion), aims to enhance Novo Nordisk’s filling capacity from 2026, ensuring the continued growth and supply of its popular weight-loss drugs.
