Novo Nordisk expands production of raw materials/development of oral drugs

On Wednesday, Novo Nordisk said that it expects to invest about 8 billion Danish kroner (about 1.3 billion US dollars) in capital projects in 2021 to increase the production capacity of active pharmaceutical ingredients (API). The company's chief financial officer Karsten Munk Knudsen said in a conference call with analysts that this expenditure will help advance its oral drug delivery work.

In the fourth quarter of 2019, Novo Nordisk launched the world’s first and only oral glucagon-like peptide-1 (GLP-1) receptor agonist (semaglutide). It is a kind of medicine for the treatment of type 2 diabetes, with heavy sales potential. But the company also sees potential new uses for its oral drug delivery platform and is strengthening its manufacturing network to support its march in this direction.

Knudsen said on the conference call that capital expenditure has increased significantly from approximately 6 billion Danish kroner (US$1 billion) in history, based on "positive pipeline progress," and noted that the company is preparing for a high-dose oral semaglutide trial.

Novo Nordisk’s forthcoming chief scientific officer, Mads Krogsgaard Thomsen, said in a conference call that the trial is “high priority” because the company hopes to “stand out in the market with highly effective oral biologics, regardless of the dosage. Are better than our expected progress opponents."

In addition to the trial of high-dose oral semaglutide in the treatment of diabetes, the company also plans to conduct a phase 3 study of semaglutide in the treatment of Alzheimer's disease. In conclusion, Thomsen said, "The reason why we have increased our production capacity is basically to meet the potential demand of some of these pipeline projects, but also to meet potential pipeline projects on the same platform that have not yet been publicly disclosed."

The increase in capital expenditure coincides with Novo Nordisk's large-scale expansion in the United States. In 2016, the company threw out a plan to build a $2 billion API production base in Clayton, North Carolina, for oral semaglutide and other drugs. The plant is expected to employ 700 people, which is an expansion of Novo Nordisk's local plant.

In a conference call this Wednesday, Knudsen said that the North Carolina project has entered the "final phase" and most construction companies have left the site. After submitting to the US FDA for review, the first phase of production will start.

In addition, Novo Nordisk also acquired a pharmaceutical factory in Treyburn, North Carolina from the embarrassed Purdue Pharma in 2019. A spokesperson for Novo Norton stated at the time that the company “wanted to establish a tablet production capacity in the United States in order to establish a local supply chain for oral semaglutide and future oral drugs.” He added that considering the proximity to Clayton, The factory is very meaningful.

Of course, since Novo Nordisk announced these supply chain initiatives, the company has received approval from the US FDA for the oral version of semaglutide . The drug's launch coincides with the COVID-19 pandemic, but in 2020, sales of this oral GLP-1 receptor agonist will increase to 300 million US dollars.