Novo Nordisk invests $2.3 billion in France to boost obesity drug production

Novo Nordisk (NOVOb.CO) on Thursday announced a $2.3 billion investment to boost production of its wildly popular weight-loss and diabetes drugs at a site in Chartres, France as it races to meet soaring demand.

The investment will significantly increase production capacity for current medicines including Ozempic and Wegovy as well as other obesity treatments that are being developed, the Danish drugmaker said.

There is a growing crisis in Europe over supply of diabetes therapy Ozempic, which uses the same ingredient semaglutide as the hugely popular weight-loss drug Wegovy, which is not yet widely available in Europe.

Novo this week introduced curbs on the use of Ozempic, which is also widely used for weight loss, in the European Union because of this ‘off label’ use. Germany is considering banning exports of the drug. Belgium has banned prescriptions of the weekly injection unless they are for type 2 diabetes patients.

The British government tried in July to prevent Ozempic reaching people who want to lose weight but a Reuters report found people without diabetes are still buying the medicine for weight loss.

Thursday’s announcement comes after Novo earlier this month announced a $6 billion investment in its native Denmark to boost production.

WIN FOR FRANCE’S MACRON

It is also a boost for French President Emmanuel Macron as a global economic slowdown threatens to undo the progress made over the past few years in curbing French unemployment.

Macron’s office told journalists ahead of the announcement that he convinced Novo Nordisk CEO Lars Fruergaard Jorgensen to make the investment during his “Choose France” summit earlier this year. The company did not immediately comment on this.

The investment mirrors a similar move by US rival Eli Lilly (LLY.N), which last week laid out plans to build a $2.5 billion manufacturing site in Germany in response to soaring demand for its new diabetes and obesity therapies.

Analysts have estimated the obesity drug market will be worth as much as $100 billion by 2030.

Novo said the French investment will significantly increase its capacity for several types of manufacturing needed to make its weight-loss and diabetes drugs from the GLP-1 drug class. Those are the specialist work of filling the injection pens with the active ingredient semaglutide, and assembly and packaging of the injection pens.

Novo said earlier this month that it is ramping up its in-house manufacturing capacity to fill injection pens for Ozempic and for the European version of Wegovy, but did not give details.

The company employs nearly 2,000 people at the Chartres factory west of Paris. The investment is expected to create 500 more jobs, Novo said. Construction has begun and will be completed between 2026 and 2028.

($1 = 6.8320 Danish crowns)