Novo Nordisk, the Danish pharmaceutical company, announced on Monday that it will invest $4.1 billion in expanding its U.S. production capabilities. The aim is to meet the increasing demand for its popular weight loss drugs.
The investment includes the construction of a 1.4 million square foot production facility near Raleigh, North Carolina, which will double the size of the site. The additional capacity is expected to be operational between 2027 and 2029.
This step 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. This market is expected to generate $42 billion in revenue this year and could grow to up to $130 billion by 2030.
Both Novo Nordisk's weight loss drug Wegovy and its diabetes drug Ozempic, as well as Eli Lilly's competing products Zepbound and Mounjaro, have suffered from shortages in recent months, according to the U.S. Food and Drug Administration (FDA).
Both companies have invested billions in increasing their production capacity. Novo Nordisk has agreed this year to pay $11 billion for three "Fill and Finish" sites from Catalent. The "Fill and Finish" process involves formulating the medicines and filling them into syringes.
With the latest investment, Novo Nordisk has committed a total of $6.8 billion this year to increasing its own production capacities. Last year, the company announced plans to invest $6.5 billion in a new production site in Denmark to boost the production of Semaglutide, the active ingredient in its weight loss medications.
Eli Lilly announced last month that it will invest $5.3 billion in a production site in its home state of Indiana to manufacture Tirzepatide, the active ingredient behind its weight loss drugs. Since 2020, Eli Lilly has invested $18 billion in building production facilities at five locations in the USA and Europe.
Lars Fruergaard Jørgensen, CEO of Novo Nordisk, described the investment as "another clear signal of our efforts to scale our production to meet the growing global demand for our life-changing medications." The facility in North Carolina will also contribute to the production of drugs for other chronic diseases.
Novo Nordisk has sufficient "Fill and Finish" capacity to manufacture an estimated 850 million injection pens for all its diabetes and weight loss drugs this year, according to industry estimates seen by the Financial Times.
The rising demand for weight loss drugs has made Novo Nordisk the most valuable company in Europe, with a market capitalization of $636 billion as of Monday afternoon.
The new production site in the city of Clayton, North Carolina, will create 1,000 new jobs and complement the existing workforce of 2,500 employees in the region. Novo Nordisk has been present in Clayton since 1993.
