Novo Nordisk Announces $4.1 Billion Investment in U.S. Manufacturing Expansion

Novo Nordisk

Novo Nordisk (NYSE:NVO), the manufacturer of the popular obesity drug Wegovy and diabetes medication Ozempic, announced on Monday its plan to invest $4.1 billion in constructing a new U.S. facility for filling injection pens.

The new facility will be situated at Novo Nordisk’s primary U.S. manufacturing site in Clayton, North Carolina, and is expected to be completed between 2027 and 2029. This expansion will add 1,000 jobs to the existing 2,500 at the site, which has been operational for 31 years.

Late last year, Novo Nordisk disclosed to Reuters its efforts to increase in-house capacity for the fill-finish process—filling injection pens—at various sites in the U.S. and Europe. The surging demand for Wegovy in the U.S. and other markets has propelled Novo Nordisk’s shares to record highs, making it Europe’s most valuable listed company, surpassing LVMH.

However, this success has resulted in shortages, compelling Novo Nordisk to limit the number of patients who can access the weekly injection. The urgency to increase Wegovy production has intensified since competitor Eli Lilly (NYSE:LLY) launched its obesity drug, Zepbound, in the U.S. in December.

Both companies are struggling to meet the burgeoning demand, with some experts predicting that sales for obesity treatments could reach $150 billion annually by the early 2030s. Since Wegovy’s U.S. launch in mid-2021, Novo Nordisk has invested billions to boost production, focusing on facilities in Denmark and other sites, including the one in North Carolina.

In a strategic move to further enhance Wegovy’s manufacturing capacity, Novo Nordisk’s controlling shareholder, Novo Holdings, announced in February the acquisition of Catalent (NYSE:CTLT), a major U.S.-based contract drugmaker and subcontractor for Wegovy production, for $16.5 billion. Following the deal, Novo Holdings plans to sell three of Catalent’s fill-finish sites—in Italy, Belgium, and the U.S.—to Novo Nordisk.

Niels Laurbjerg Nielsen, a corporate vice president at Novo Nordisk responsible for fill-finish manufacturing at the Clayton facility, declined to comment on the Catalent acquisition. In an interview with Reuters, he did not specify the additional dosage capacity of the new factory but emphasized that the investment aims to reach more patients.

Initially, the focus will be on producing Wegovy and Ozempic, with the potential to manufacture other future medicines on the new lines, though specific details were not disclosed.