Novo Nordisk AS plans to invest 4 billion in China to increase production capacity, is the launch of weight-loss drugs imminent? | Jianzhi Research

Novo Nordisk AS, the Danish pharmaceutical giant, announced a major investment plan this Tuesday, investing approximately $556 million (around 4 billion RMB) to upgrade and expand its production base in Tianjin, China. This strategic investment not only celebrates the company's 30th anniversary in the Chinese market but also marks a key step in its global strategic layout.

According to the official press release from Novo Nordisk AS, the expansion project is expected to be completed and fully operational by 2027, significantly increasing the company's production capacity in China to effectively meet the urgent demand for innovative drugs in the Chinese market.

At the core of this project is the use of innovative isolator technology, aimed at establishing a safety barrier between the aseptic production environment and the external environment, thereby significantly improving production efficiency and product quality. This investment initiative follows the company's earlier investment of 1.18 billion RMB in capacity expansion at the Tianjin plant in early 2023, further strengthening Novo Nordisk AS's manufacturing capabilities in China.

On a global scale, Novo Nordisk AS is continuously expanding its manufacturing footprint

The company recently acquired land in Ireland to enhance its production capacity in Europe.

In addition, in response to the growing global demand for pharmaceutical products, Novo Nordisk AS's parent company, Novo Holdings, acquired drug subcontractor Catalent for $16.5 billion, a move that has garnered widespread attention in the CDMO industry.

As part of the acquisition plan, Novo Nordisk AS will prepay $11 billion to acquire Catalent's filling factories in Italy, Belgium, and the United States. Novo Nordisk AS previously stated that it expects these three new sites to "gradually increase the company's filling capacity from 2026 onwards."

During this month's capital market activity day, Novo Nordisk AS revealed that it is expected to officially launch the obesity indication brand Wegovy of semaglutide in China in 2024.

The company's listing strategy will focus on "Volume-capped launch" and "Out-of-pocket market," and plans to complete in-hospital work at selected target hospitals while exploring commercial insurance coverage for specific populations.

In 2023, Novo Nordisk AS achieved significant performance growth, with annual revenue reaching approximately $33.771 billion, a year-on-year increase of 31%. The company's operating profit also increased by 37% to approximately $14.914 billion The strong growth of this performance is mainly attributed to the rapid growth of its GLP-1 drug series, especially the semaglutide products.

The total revenue of the semaglutide series products in 2023 reached approximately USD 21.14 billion, accounting for 63% of Novo Nordisk AS's total revenue. Among them, the revenue of the diabetes injection Ozempic was approximately USD 13.88 billion, a year-on-year increase of 66%; the revenue of the oral diabetes drug Rybelsus was approximately USD 2.72 billion, a year-on-year increase of 71%; and the sales of the weight loss injection Wegovy reached approximately USD 4.54 billion, a significant increase of 420% year-on-year, highlighting the strong demand in the weight loss drug market.

In the Chinese market, Novo Nordisk AS's revenue accounts for approximately 9% to 11%. In 2023, the revenue in the China region was approximately USD 2.426 billion, a 3% year-on-year increase. In this market, the revenue of GLP-1 products reached approximately USD 0.903 billion, occupying a 76.6% market share, with a year-on-year increase of about 66%.

With the launch of Wegovy in the Chinese market, Novo Nordisk AS expects to further expand its market share in China, especially in the self-pay market and commercial insurance coverage.

Novo Nordisk AS's Next-Generation Weight Loss Product Shows Stunning Results

During a recent capital market day, Novo Nordisk AS (Novo Nordisk) revealed the positive results of its oral amylin in a small Phase I clinical trial. The trial conducted in Copenhagen showed that after just 12 weeks of treatment, patients' average weight decreased by 13.1%. Amycretin is a combination agonist of GLP-1 (glucagon-like peptide-1) and amylin receptors, and this drug is also being tested for subcutaneous administration.

Executives at Novo Nordisk AS emphasized their interest in amylin as a therapeutic target during an investor meeting, describing it as a "key competitive advantage" for the company. Amylin is an intestinal hormone similar to GLP-1 that plays a role in regulating blood sugar and satiety. By simultaneously activating GLP-1 and amylin receptors, amycretin is expected to be an effective weight loss therapy.

Furthermore, Novo Nordisk AS sees amycretin as one of its strategies against competitors such as Eli Lilly and other generic drug competitors. With patents expiring, generic drug manufacturers may enter the market, offering lower-priced alternatives. Therefore, developing new innovative drugs like amycretin is crucial for maintaining the company's market position and profitability