Danish drugmaker Novo Nordisk will spend 5.4 billion Danish kroner, or about $744 million, to expand its clinical manufacturing facilities in a suburb near Copenhagen, Denmark.
The money will be used to build a new plant to supply active drug ingredients for the company’s clinical trials as well as provide further capacity for developing new oral and injectable medicines, Novo said Tuesday.
“This investment in expanding our clinical [active pharmaceutical ingredients] capacity in Bagsværd is an important step to ensure the continuous progress of our development pipeline,” said Jesper Bøving, Novo senior vice president for chemistry, manufacturing and controls development, in a statement.
Novo expects the project to be completed in 2024 and create around 160 new jobs.
The expansion comes nearly a year after Novo announced a 17 billion Danish kroner expansion at its manufacturing site in Kalundborg, Denmark. That project, to be finalized in 2027, will add commercial capacity for making ingredients used in oral and injectable products.
The company, known primarily for its diabetes drugs, sees its growth increasingly tied to its weight-loss treatments. Novo said in March that it aims to more than triple sales of obesity drugs by 2025. But the company has been unable to keep up with demand for its weight-loss injection Wegovy that was approved in 2021.
The Bagsværd expansion does not appear to be related to ongoing Wegovy supply issues, which the company has said should be resolved by the end of the year. “There are no guarantees in this work, but we would not put this statement into our company announcement unless we're confident that we'd be able to resupply the U.S. market in December with Wegovy,” said chief financial officer Karsten Munk Knudsen on a Nov. 3 earnings call with analysts.
By the second half of 2023, Novo expects to have four sites supplying and filling vials for the weight-loss injection, Ludovic Helfgott, head of rare diseases, said on the call.
Wegovy sales slid by 2% in the third quarter from the previous quarter, falling to 1.16 billion Danish kroner, or $160 million. Sales of Wegovy and its earlier weight-loss treatment Saxenda totaled 11.38 billion Danish kroner in the first nine months of the year. The drugmaker expects obesity drug sales to exceed 25 billion Danish kroner by 2025.