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- Novo Nordisk makes Ozempic and Wegovy, two hit drugs that treat obesity.
- Supply is a major issue right now, with the firm warning a European regulator it may ration Ozempic.
- In the past two weeks, it's announced more than $8 billion in manufacturing investments.
Novo Nordisk, maker of the popular anti-obesity drugs Ozempic and Wegovy, is investing billions to ramp up production capacity amid surging demand.
Today, the company announced it will spend over $2.3 billion to expand a production facility in France, finalizing a deal with French President Emmanuel Macron. This investment will double the size of Novo's facility in Chartres.
The move comes just after Novo Nordisk unveiled plans to shell out over $6 billion to expand manufacturing capacity in Denmark. That money will go toward increasing production capacity for semaglutide, the key ingredient in Ozempic and related medications.
Earlier this week, Novo Nordisk warned it will have to ration Ozempic starter kits in Europe and reduce supplies of another diabetes drug, Victoza, in order to prioritize making more Ozempic. The company predicts intermittent Ozempic shortages throughout 2024, while Victoza shortages could last until at least the second quarter of 2024.
Novo Nordisk's surge in manufacturing investment comes as its main rival in the space, Eli Lilly, is also "aggressively planning" manufacturing expansions, according to CEO David Ricks.
Lilly recently gained FDA approval for a new anti-obesity medication Zepbound, which will compete directly with Ozempic and Wegovy.
The investments to ramp up production come as the global market for anti-obesity drugs is expected to reach $100 billion a year by 2030, up from around $6 billion currently, according to Goldman Sachs.
With obesity rates rising globally, millions of patients are expected to turn to medications like Ozempic and Wegovy for weight loss in the coming years.