Ozempic maker Novo plans another $4.1 billion US factory
Novo Nordisk A/S plans to invest $4.1 billion in another U.S. factory, plowing more money into its biggest market amid rising discontent over the cost of its obesity and diabetes drugs.
The project in Clayton, North Carolina, will double the company’s production footprint in the U.S., adding 1.4 million square feet of space for the final stages of manufacturing in which Novo’s medicines are filled into injector pens and prepared for consumers. The facility will add 1,000 jobs, the Danish drugmaker said Monday.
Shares of Novo closed at $146.91, rising 3.25% on Tuesday. The stock is up nearly 85% in the past year.
The new U.S. site is the latest in a series of multibillion-dollar investments into ratcheting up supply for diabetes drug Ozempic and weight-loss medicine Wegovy, which have propelled Novo into the limelight and made it Europe’s biggest company. Novo said it now plans to pour some $6.8 billion into production investments this year, up from $3.9 billion in 2023.
Novo is buying capacity as well as building its own. The company agreed earlier this year to acquire three of contract manufacturer Catalent Inc.’s factories for $11 billion.
Rival Eli Lilly & Co. has also been spending billions of dollars to boost capacity, last month pledging $5.3 billion to add to its Indiana facility that makes the active ingredient in obesity medicine Zepbound and diabetes drug Mounjaro.
Novo’s latest investment comes amid increasing criticism of the cost of its drugs in the U.S. The country is the largest market for weight-loss medicines because of the scope of obesity – nearly three-quarters of adults are overweight or obese – and because U.S. drug prices are higher than those elsewhere in the world. Chief Executive Officer Lars Fruergaard Jorgensen will testify before a Senate committee chaired by Senator Bernie Sanders in September about the drugs’ prices.
In North Carolina, the health plan for state employees dropped coverage of weight-loss drugs earlier this year after predicting a $1.5 billion loss by 2030 if it continued to pay for them.
The new facility will produce future treatments for obesity and other diseases as well as the medicines in Novo’s current portfolio, Novo said. Production in North Carolina is a cornerstone of the Danish company’s growth, product supply chief Henrik Wulff said in a statement.
Work has already started on the 56-acre Clayton site, Novo’s third in the city. It’s across the street from another Novo factory. Construction will finish gradually, between 2027 and 2029.
Novo last year announced a $6 billion expansion to a drug ingredient factory in Kalundborg, Denmark, as well as a $2.5 billion addition to its site in Chartres, France. It said on Monday that it has decided not to pursue a potential expansion project in Dublin.