Novo Nordisk is investing 432 million euros ($506 million) in a facility in Ireland as it expands its production capacities to make the newly launched Wegovy pill, the Danish drugmaker said Monday.
The news comes about two months after Novo launched its blockbuster weight loss drug Wegovy in pill form in the U.S. market, in what has been described as one of the strongest launches ever.
“With the investment in the Athlone facility, Novo Nordisk is expanding its production capacities for oral products, which will strengthen our ability to meet both current and future demand, outside the US,” said Kasper Bødker Mejlvang, Novo’s executive vice president of chemistry, manufacturing and controls and product supply.
It follows Novo Nordisk losing market share to Eli Lilly, and investors doubting that its pipeline holds enough promise to win it back. The stock has tumbled as a result, and currently trades at roughly a quarter of what it did at its peak in mid-2024.
“The investment is a sign of increasing focus and bet on the oral space from Novo Nordisk – an area where Novo has an edge,” Jyske Bank analyst Henrik Hallengreen Laustsen told CNBC Monday.
Ensuring Wegovy supply
Novo enjoyed a first-mover advantage in the anti-obesity market and launched its GLP-1 drug semaglutide, sold as Ozempic and Wegovy, years before Lilly’s rival medicine.
It did, however, misjudge the demand for its weight loss jabs. With semaglutide in short supply, compounding pharmacies were allowed to flourish through a loophole in U.S. regulations, which allows the legal making of patented drugs during a shortage.
Supply issues have since been resolved as Novo ramped up manufacturing capacity. Even so, compunders continue to sell cheaper copycat versions of the drug, and it is still weighing on Novo’s sales. The company is involved in multiple legal battles over intellectual property.
Novo has repeatedly said it has enough supply of the Wegovy pill to meet demand in the U.S., the only market where it has launched so far.
Even with the new Ireland investment, Sydbank analyst Søren Løntoft Hansen says it will be a challenge for Novo to meet demand for the pill globally.
Novo’s announcement Monday about expanding manufacturing capacity reflects a desire to launch the pill in other countries, Hansen said. It is currently under review by the European Medicines Agency, and a potential approval is expected by year-end.
“It also reflects the very successful launch in the U.S., which is actually also perhaps the best launch of a drug ever,” Hansen told CNBC.
According to Barclays analysts who closely track Wegovy’s uptake, U.S. Wegovy pill prescriptions are outpacing the early rollouts of existing GLP-1 injections. Novo CEO Mike Doudstar told CNBC in mid-February that 246,000 patients were taking oral Wegovy.
Novo Nordisk shares are trailing Eli Lilly’s.
Novo shares were down about 1.2% Monday, notching a fresh 52-week low.
“It seems like from the share price reaction that it is a drop in the ocean, but I actually think this signals a belief in this Wegovy pill and that, capacity-wise, they need more [to meet] possible future demand outside the U.S.,” said Hansen.
“If we were about to throw in the towel we would not be investing in factories in Ireland,” CEO Mike Doustdar said in February, according to a Bloomberg report.
The market is likely waiting for Lilly to launch its rival weight loss pill orforglipron in the second quarter of this year before making a call on Wegovy pill’s future prospects.
The construction projects in Ireland have already begun and will be finalized gradually throughout 2027 and 2028, Novo said. It will involve both capacity expansion and technological upgrades of existing facilities.
According to Laustsen, the site is likely to focus on oral zenagamtide and amycretin, both experimental drugs developed by Novo. “An expected launch in 2029 and fits well with Novo’s strategic element of increasing focus on oral opportunities in the obesity market,” he said.
