Novo Nordisk increase supply of Wegovy

Novo Nordisk has announced its highest annual profit in decades, attributing it to the strong sales of its diabetes and obesity medications, such as Ozempic and Wegovy. The Denmark-based pharmaceutical company revealed plans to increase the availability of Wegovy in the U.S., which could help address the ongoing shortages of this highly sought-after obesity treatment.

CEO Lars Fruergaard Jørgensen stated, “We actually expect the same level of demand in the new year and when you look at the fact that we are only serving a couple of million patients living with obesity, some 40 million people living with diabetes — there is a huge market out there.”

Novo Nordisk is facing increased competition in the weight loss market from Eli Lilly, a well-established player in the U.S. The Danish company acknowledges the likelihood of downward price pressures in the country due to this competition. However, Jørgensen expressed the belief that the competitive landscape would ultimately be beneficial for patients.

Jørgensen expressed to CNBC’s Charlotte Reed on Wednesday his belief that to significantly address obesity and its related health issues, the involvement of multiple companies is crucial. 

He emphasized that they are accustomed to competing based on the quality of their products and that the long-standing competition they face has led to mutual respect over the years, fostering healthy competition that benefits patients and reduces the burden on healthcare systems. Overall, he viewed the competition as advantageous for both companies and society as a whole.

Novo Nordisk doesn’t anticipate global demand slowing down, despite the fact that prices may have to be slashed. 

In their earnings report on Wednesday, Jørgensen and Chairman Helge Lund highlighted the increasing unmet needs in type 2 diabetes and obesity, noting the growing prevalence of these interconnected health challenges and emphasizing the surging demand for their GLP-1-based therapies as a response to these trends. 

They noted that this increased demand allowed the firm to reach a larger number of patients than ever before in its century-long history, leading to robust sales growth across North America and beyond.

Because of this, the company’s supply chain was under more stress than usual, and in 2023, it experienced “periodic constraints” throughout its portfolio as it tried to meet customer demand.

Jørgensen highlighted their response to the increased demand by emphasizing significant investments in expanding production capacity to cater to millions more patients globally. They mentioned announcing investments totaling over DKK 75 billion in 2023 alone for expanding production sites worldwide. With construction already in progress for these projects, they aim to operate existing facilities around the clock with the goal of producing more of their transformative medicines than ever before.

At current currency rates, Novo’s yearly profit of 83.7 billion Danish kroner (approximately $12 billion) was 51% more than what it made the year before. S&P Global Market Intelligence data shows that this is the highest yearly net profit for the firm since 1989.

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