Nordisk is investing 432 million euros ($506 million) in a facility in Ireland as it expands its production capabilities to make the newly launched Wegovy pill, the Danish drugmaker said on Monday.
The news comes about two months after Novo launched its blockbuster weight-loss drug Wegovy in pill form on the US market, in what has been described as one of the strongest launches ever.
“With the investment in the Athlone facility, Novo Nordisk is expanding its oral product production capabilities, which will strengthen our ability to meet current and future demand, outside of the US,” said Kasper Bødker Mejlvang, executive vice president of chemistry, manufacturing, controls and product supply at Novo.
This follows Novo Nordisk losing market share to Eli Lillyand investors doubt that his project is promising enough to recover it. As a result, the stock has plummeted and is currently trading at about a quarter of what it was trading at its peak in mid-2024.
“The investment is a sign of growing focus and commitment by Novo Nordisk in the oral space, an area where Novo has an advantage,” Jyske Bank analyst Henrik Hallengreen Laustsen told CNBC on Monday.
Guarantee the supply of Wegovy
Novo enjoyed first-mover advantage against obesity and launched its GLP-1 semaglutide drug, sold as Ozempic and Wegovy, years before Lilly's rival drug.
However, it miscalculated the demand for its weight-loss vaccines. Faced with a shortage of semaglutide, compounding pharmacies were allowed to thrive thanks to a loophole in US regulations, which allows legal manufacturing of patented drugs during a shortage.
Supply issues have since been resolved as Novo increased its manufacturing capacity. Still, compunders continue to sell cheaper copycat versions of the drug, and this still weighs on Novo's sales. The company is involved in multiple legal battles over intellectual property.
Novo has repeatedly said it has enough supply of the Wegovy pill to meet demand in the United States, the only market where it has launched it so far.
Even with the new investment in Ireland, Sydbank analyst Søren Løntoft Hansen says it will be a challenge for Novo to meet demand for the pill globally.
Novo's announcement Monday about expanding manufacturing capacity reflects a desire to launch the pill in other countries, Hansen said. It is currently being reviewed by the European Medicines Agency and possible approval is expected by the end of the year.
“It also reflects the very successful launch in the US, which is actually also perhaps the best launch of a drug ever,” Hansen told CNBC.
According to Barclays analysts who closely monitor Wegovy uptake, prescriptions for Wegovy pills in the United States are outpacing the first launches of existing GLP-1 injections. Novo CEO Mike Doudstar told CNBC in mid-February that 246,000 patients were taking oral Wegovy.
Novo Nordisk shares trail Eli Lilly.
Novo shares fell about 1.2% on Monday, hitting a new 52-week low.
“From the share price reaction, it seems like it's a drop in the ocean, but I actually think this indicates a belief in this Wegovy pill and that, in terms of capacity, they need more [to meet] possible future demand outside the US,” Hansen said.
“If we were about to throw in the towel, we wouldn't be investing in factories in Ireland,” CEO Mike Doustdar said in February, according to a Bloomberg report.
The market is likely waiting for Lilly to launch its rival weight loss pill, orforglipron, in the second quarter of this year before making a call on the future prospects of the Wegovy pill.
Construction projects in Ireland have already started and will be gradually completed throughout 2027 and 2028, Novo said. It will involve both capacity expansion and technological upgrades to existing facilities.
According to Laustsen, the site is likely to focus on oral zenagamtide and amicretin, both experimental drugs developed by Novo. “An expected launch in 2029 and fits well with Novo's strategic element of increasingly focusing on oral opportunities in the obesity market,” he said.
