Danish pharmaceutical company Novo Nordisk has decided to invest $4.1 billion in the United States to expand the production of its weight loss drug, Wegovy. This move is expected to alleviate the severe supply shortage.
According to the Financial Times (FT), Novo Nordisk announced on June 24 that it would double the Wegovy production facilities near Raleigh, North Carolina, investing $4.1 billion to expand these facilities.
Novo Nordisk plans to build its new facilities on a site of approximately 130 million hectares.
The new production facilities are expected to start operating between 2027 and 2029.
Novo Nordisk is competing with major American pharmaceutical company Eli Lilly in the GLP-1 category weight loss drug market to expand market share.
Weight loss drugs, along with obesity drugs with the same ingredients, are expected to reach sales of $42 billion this year. By 2030, it is expected to expand to $130 billion.
However, Novo Nordisk’s injectable weight loss drug Wegovy, its diabetes drug Ozempic, Eli Lilly’s weight loss drug Zepbound, and its diabetes drug Mounjaro are all suffering from severe supply shortages. Both companies are investing billions of dollars to expand production facilities.
Along with this $4.1 billion investment, Novo Nordisk has decided to invest $6.8 billion in expanding its production facilities this year alone.
Last year, it decided to spend $6.5 billion on facilities in Denmark.
Eli Lilly also decided last month to invest $5.3 billion in expanding its production facilities in Indiana.
Since 2020, Eli Lilly has invested a total of $18 billion in five factories in the U.S. and Europe.
Meanwhile, Eli Lilly and Novo Nordisk have grown significantly thanks to the boom in weight loss drugs.
Novo Nordisk is the largest listed company in Europe in terms of market capitalization.
As of June 24, its market capitalization reached $636 billion.
Eli Lilly has become the largest pharmaceutical company in the U.S. Its current market capitalization sits at $845.9 billion, making it the eighth-largest listed company in the U.S. in terms of market capitalization.
Following Eli Lilly in the pharmaceutical sector is Johnson & Johnson (J&J), with a market cap of $358.8 billion, ranking at #20..
