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BUSINESS

Novo Nordisk to invest €2.1 billion in French obesity drug plant

Danish pharmaceutical giant Novo Nordisk will announce Thursday a major investment in a French production site to expand capacity for a blockbuster anti-obesity drug, the French presidency said.

Published: 23 November 2023 16:39 CET
Novo Nordisk to invest €2.1 billion in French obesity drug plant
Novo Nordisk workers working at a haemophilia API* production facillity in Hillerød, Denmark. Photo: Novo Nordisk

In a deal to be sealed officially with President Emmanuel Macron, Novo Nordisk will invest 2.1 billion euros ($2.3 billion) in an existing facility in Chartres, southwest of Paris.

Novo Nordisk is the European Union’s most valuable company with market capitalisation of around $460 billion, mostly thanks to growing use of its anti-diabetes drugs as weight-loss derivatives.

The Danish company has found that its Semaglutide medication, originally meant for diabetes, is also effective against obesity, giving it massive global potential.

Marketed as Wegovy in the United States, Denmark, Norway and Germany, the drug helps chronically overweight patients by stimulating insulin secretion and acting as an appetite suppressant.

Goldman Sachs, a financial firm, predicted last month that the global market for anti-obesity medication (AOM) could grow to $100 billion by 2030, against around six billion now.

Obesity rates have almost tripled around the world since 1975, and are set to rise further, it said.

In the United States alone, 15 million adults were likely to receive anti-obesity treatment by 2030, Goldman said, identifying Novo Nordisk, and rivals Eli Lilly, as the world’s two dominant AOM makers by then.

Novo Nordisk will double the size of its French site, adding 500 jobs to the 1,600 already there. The investments mostly concern the production of diabetes drugs, cartridges and vials, it said, with a 2028 target date for completion.

Novo Nordisk already said this month it was investing 42 billion Danish kroner ($6.1 billion) to expand its facilities in Denmark.

The French presidency credited Macron’s drive to attract foreign industrial investment to France for the Novo deal.

It follows a 6.7-billion-euro ($7.3 billion) pledge for the production and recycling of electric batteries by Asian firms.

An investment of 500 million euros by US pharma company Pfizer was announced in May during a “Choose France” investment conference hosted by Macron.

Stung by recent drugs shortages in France, including for basic antibiotics and pain medicine paracetamol, the government has been keen to bring pharmaceutical production back to the country.

Novo Nordisk said it hopes to win full regulatory approval to sell Wegovy as an anti-obesity drug in France next year.

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ECONOMY

Explained: Why Denmark’s economy is looking in such extremely good shape

Denmark's economy is growing faster than the government expected, inflation is falling faster, and employment is holding up better. We explain why the new economic forecast shows Denmark has achieved the softest of soft landings.

Published: 16 May 2024 15:41 CEST
Explained: Why Denmark's economy is looking in such extremely good shape

 “When I stood here a year ago and presented my first financial statement, it was with a message that the Danish economy was heading for a soft landing. We have since been strengthened in that assessment,” Stephanie Lose, Denmark’s economy minister, said at a press conference announcing the government’s Økonomisk Redegørelse, or financial statement, for May. 

In the press statement, she said, “optimism is returning to the Danish economy”, with the economy likely to improve further in the coming year.

“We have carried out reforms that make Denmark richer and help to secure the necessary workforce for Danish companies,” she said. 

How has the government changed its growth forecasts? 

The government has increased its expectation for Denmark’s growth rate since its last statement in December, with it now expecting 2.7 percent growth in 2024, up from the1.4 percent it expected for the year in December. 

It has also upgraded its expectations for 2025, predicting growth of 1.8 percent compared to the 1 percent it expected back in December. 

Lose said that the pharmaceutical company Novo Nordisk, which is expanding rapidly as a result of the success of its weight-loss drugs Ozempic and Wegovy, had driven much of Denmark’s recent growth, with the reopening of Denmark’s gas field, the Tyra field, would start to contribute to growth soon.

“In the past two years, the pharmaceutical industry in particular has driven growth in the Danish economy, while there has been stagnation or decline in large parts of the rest of the economy,” she said. “In the coming years, other industries again look set to contribute to growth. Added to this is the reopening of the Tyra field in the North Sea, which also contributes to growth in GDP.” 

What does the government expect to happen to inflation? 

Denmark’s inflation rate fell rapidly from a peak of over 10 percent in October 2022 to below 2 percent in September 2023, where it has stayed ever since. But Lose said she expected the rate to edge up over the coming years. 

“Inflation has fallen quickly and faster than expected,” Lose said. “In the new forecast, we expect inflation to rise in the coming months, as the prices of services and energy pull in the direction of slightly higher inflation.” 

What does the government expect to happen to employment? 

Thanks mainly to Novo Nordisk increasing staffing to manage the success of its new drugs, and the bounce back from the pandemic, employment has also held up better than expected.

Employment soared by some 160,000 people between 2021 and 2023, and the government now expects the number of employed people to grow by a further 13,000 in 2024 but to then fall by 18,000 in 2025. 

“Employment has long been at a sky-high level, so it is estimated that we will see some adjustment. But we do not expect an extensive setback, because the Danish economy stands on a rock-solid foundation,” Lose said.

What does the government expect to happen to housing prices? 

The government has significantly upgraded its expectations of what will happen to the price of domestic property this year. It now expects prices to increase by an average of 3.2 percent in 2024 and 3 percent in 2025, a rise of two percentage points on the 1.2 percent rise for 2024 it expected when it made its last forecast in December. 

This is due to the continued strong labour market, which has seen rising incomes and wage increases in Denmark as a result of new collective agreements, at the same time as Denmarks Nationalbank is expected to cut interest rates. 

This rise follows two consecutive years of falling real house prices in 2022 and 2023. 

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