Novo Nordisk increases investment in API manufacturing facility to $2.3B

Amid ongoing shortages of some of its most popular drugs, Novo Nordisk said it is investing $2.3 billion (15.9 billion Danish kroner) total to expand an existing active pharmaceutical ingredient (API) production facility in Denmark to meet future demand for its chronic disease drugs.

While the company, grappling with unprecedented demand for its flagship products Wegovy and Ozempic, was already planning on investing more into API manufacturing and included it in its $3.6 billion (25 billion Danish kroner) capital expenditure plan released in February with its full-year results, it added additional cash to the manufacturing pot. Novo said Monday that the additional amount will be invested over the next six years.

According to the company’s 2023 financial results, the expected capital expenditures increase this year is primarily because of investments in API production and fill-finish capacity for injectable and oral products.

Construction is already underway on the new, approximately 65,000 square-meter (less than 700,000 square feet) facility. But it will be some time before it’s completed, and won’t start producing API until early 2029. The expansion will create about 340 new jobs in Hillerød, Denmark. The new project will add production capacity and be a “key enabler” in developing Novo’s future clinical late-phase product portfolio.

Henrik Wulff

“This important investment will ensure the continuous development of our late-phase pipeline into deliveries of important medicines for treatments to patients worldwide,” Henrik Wulff, EVP of product supply, quality & IT at Novo, said in a statement.

Supply issues for Novo aren’t new – its obesity drug Wegovy and type 2 diabetes drug Ozempic both faced shortages last year thanks to high demand, limitations at manufacturing sites and the war in Ukraine, the company said earlier this year. And it expects those supply constraints to go into 2023.

Multiple doses of Novo’s growth hormone Norditropin are also in shortage because of manufacturing delays, according to an FDA site that tracks drug shortages as well as the American Society of Health-System Pharmacists’ shortages list. The company expected an “intermittent supply” of Norditropin doses through the end of June, though the supply of the drug should stabilize throughout the second half of the year.

According to the FDA’s site, Ozempic is still in shortage, though it listed the drug’s 1 mg, 2 mg and 0.25 mg options as “currently available.” As for Wegovy, the FDA said there will be “limited availability” through September of this year for its 0.25 mg, 0.5 mg and 1 mg options.

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