July 15, 2024

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Novo to expand French plant in GLP-1 production push

2 min read

Dive Brief:

  • Novo Nordisk on Thursday said it will invest more than 16 billion Danish kroner, or about $2.3 billion, to expand a drug production site in Chartres, France, as it works to keep up with demand for medicines like its sought-after GLP-1 drugs for diabetes and obesity.
  • Construction has already begun and is expected to be competed from 2026 to 2028. The Danish drugmaker said the project is expected to bring in over 500 new jobs when the new facilities are finished.
  • Both Novo and rival Eli Lilly have struggled to keep up with surging demand for their diabetes and weight loss drugs, leading to shortages and dose rationing. The companies have invested in new manufacturing capacity to help meet demand.

Dive Insight:

Sales of Ozempic and Wegovy — Novo’s blockbuster drugs for diabetes and obesity, respectively — have surged this year even with Novo’s constrained supply.

Part of a class of drugs known as GLP-1 agonists, these medicines have gained in popularity over the past couple years as their benefits in managing diabetes and, more recently, shedding pounds has become better established.

They may hold other benefits, too. Novo recently presented data showing cardiovascular benefit from a trial studying Wegovy in people with heart disease who were overweight. Called SELECT, the trial showed treatment led to a 20% reduced risk of stroke, heart attack or cardiovascular death versus a placebo.

The results could expand the drug’s use as well as convince insurers to provide broader access. While Wegovy is covered by some insurers, there are concerns that widespread use could dramatically inflate healthcare spending.

In anticipate of a growing market, Novo earlier this month announced plans to spend about $6 billion adding to a manufacturing plant in Denmark, which will be completed in phases between 2025 through 2029.

Novo faces competition from Eli Lilly’s drug Zepbound, which just won U.S. approval for treating obesity. The drug is sold as Mounjaro for Type 2 diabetes, and has seen strong sales gains this year.

Analysts expect the market for GLP-1 drugs to growing considerably over the decade, with some forecasts reaching as high as $90 billion.

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