The 'Miracle Obesity Drug' Syndrome That Saved the Nation's Economy... Factories Bought Up Due to Unprecedented Demand

As demand for Wegovy (active ingredient semaglutide), known as the 'miracle obesity drug' for its 15% weight loss effect, surged, Novo Nordisk took a bold step to address the resulting supply shortage. The company acquired the contract manufacturing organization (CMO) it had previously outsourced to, aiming to expand production capacity.

[Image source=Reuters Yonhap News]

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On the 5th (local time), Novo Holdings, the holding company of Novo Nordisk, announced it would acquire the global CMO company Catalent for a total of $16.5 billion (approximately 22 trillion KRW). Novo Holdings will purchase all issued shares of Catalent at a price of $63.5 per share. This represents a 16.5% premium over Catalent's closing price of $54.51 per share on the previous trading day, the 2nd (local time). Once the merger is completed by the end of this year, Catalent will be delisted.

Through this acquisition, Novo Nordisk is expected to overcome, to some extent, the long-standing issue of insufficient production capacity for obesity treatments. Novo Nordisk plans to directly acquire three production plants located in Brussels, Belgium; Bloomington, Indiana, USA; and Anagni, Italy, as soon as possible. These plants currently handle the final 'fill & finish' process for obesity treatments. Catalent has also recently accelerated efforts to expand production capacity to increase manufacturing speed.

Recently, Novo Nordisk has achieved rapid growth through obesity treatments such as Wegovy and the earlier launched Saxenda (active ingredient liraglutide). These drugs are glucagon-like peptide-1 (GLP-1) receptor agonists, initially developed as type 2 diabetes treatments?Ozempic and Victoza?by leveraging their ability to promote insulin secretion and lower blood sugar. However, during development, the appetite-suppressing effect of GLP-1 was discovered, expanding their use into obesity treatment. Furthermore, GLP-1 is expected to expand into cardiovascular disease prevention, type 1 diabetes, liver diseases, and dementia treatments.

Novo Nordisk's GLP-1 class obesity treatment 'Wegovy (active ingredient Semaglutide)'
[Photo by Novo Nordisk]

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Consequently, popularity surged. Wegovy recorded sales of 9.648 billion Danish kroner (approximately 1.8556 trillion KRW) in the third quarter of last year, a 734% increase compared to the same period the previous year. Sales have continued to rise sharply, with 4.563 billion Danish kroner in the first quarter and 7.518 billion Danish kroner in the second quarter. Thanks to this, Novo Nordisk became the largest company by market capitalization on the European stock market and contributed to revitalizing the Danish economy overall.

However, supply could not keep up with demand, leading to a global shortage. Even Ozempic, a diabetes treatment using the same ingredient, faced supply shortages. In response, countries like the UK issued orders to stop prescribing Ozempic to patients without type 2 diabetes and to refrain from prescribing it to new patients.

As supply shortages continued, Novo Nordisk invested at least 58 billion Danish kroner (approximately 11 trillion KRW) in November last year to announce large-scale expansion plans for production plants in Kalundborg, Denmark, and Chartres, France, focusing on securing production capacity. This acquisition of Catalent is interpreted as a move to accelerate production capacity expansion by directly acquiring an existing CMO.

Kasim Kutay, CEO of Novo Holdings, said, "We are excited to support Catalent’s employees, customers, and other stakeholders in developing new products that benefit patients," adding, "We look forward to working with the Catalent team to realize the company’s full potential."

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