Novo Nordisk Announces $1.3 Billion Investment to Expand API Production and Advance Novel Oral Therapeutics

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In the fourth quarter of 2019, Novo Nordisk launched Rybelsus (semaglutide), the world’s first and only oral glucagon-like peptide-1 (GLP-1) receptor agonist. This medication for the treatment of type 2 diabetes holds blockbuster sales potential. However, the company also recognizes potential new applications for its oral delivery platform and is strengthening its manufacturing network to support its expansion in this direction.

On Wednesday, Novo Nordisk stated that it expects to invest approximately DKK 8 billion (about USD 1.3 billion) in capital projects in 2021 to increase the production capacity of active pharmaceutical ingredients (API). Karsten Munk Knudsen, the company’s Chief Financial Officer, remarked during a conference call with analysts that this expenditure would help advance its oral delivery initiatives.

Knudsen stated on the conference call that the substantial increase in capital expenditure from its historical level of approximately DKK 6 billion ($1 billion) was driven by “aggressive pipeline progress,” noting that the company is preparing to conduct trials of high-dose oral semaglutide.

Mads Krogsgaard Thomsen, Novo Nordisk’s soon-to-retire Chief Scientific Officer, stated during a conference call that the trial was “of high priority,” as the company aims to “differentiate itself in the market with an efficient oral biologic that outperforms anticipated competitors, regardless of dosage.”

In addition to the trials of high-dose oral semaglutide for the treatment of diabetes, the company also plans to conduct Phase 3 studies on semaglutide for the treatment of Alzheimer’s disease. Thomsen stated, “In summary, we are increasing production capacity primarily to meet the potential demand for some of these pipeline projects, as well as for potential pipeline assets on the same platform that have not yet been publicly disclosed.”

The increase in capital expenditure coincides with Novo Nordisk’s completion of a major expansion in the United States. In 2016, the company unveiled a plan to construct a $2 billion active pharmaceutical ingredient (API) production facility in Clayton, North Carolina, for oral semaglutide and other medications. The facility is expected to employ 700 people, representing an expansion of Novo Nordisk’s existing local operations.

During Wednesday’s conference call, Knudsen stated that the North Carolina project has entered its “final phase,” with most construction companies having already left the site. Phase 1 production activities will commence following submission for U.S. FDA review.

In addition, in 2019, Novo Nordisk acquired a pharmaceutical plant in Treyburn, North Carolina, from the embattled Purdue Pharma. A spokesperson for Novo Nordisk stated at the time that the company “aims to establish tablet manufacturing capabilities in the United States to build a domestic supply chain for oral semaglutide and future oral medications.” He added that the facility is strategically significant given its proximity to Clayton.

Certainly. Since Novo Nordisk announced these supply chain initiatives, the company has obtained U.S. FDA approval for the oral formulation of semaglutide (Rybelsus). The drug’s launch coincided with the COVID-19 pandemic, yet in 2020, sales of this oral GLP-1 receptor agonist grew to $300 million. During a conference call on Wednesday, Novo Nordisk executives stated that, regarding Rybelsus, the company has so far negotiated market access for approximately 90% of the target market, and around 80% of Rybelsus prescriptions were issued to patients initiating GLP-1 class therapy for the first time.

Reference Source: Novo Nordisk plots $1.3B in spending as it expands API production—and advances new oral meds