The Danish company behind the weight-loss injection Wegovy, has agreed to buy three manufacturing facilities for $11 billion in order to increase production due to a surge of demand.
Novo Nordisk will acquire the facilities in a three-way agreement under which Novo Holdings (its controlling shareholder) has agreed to purchase Catalent, a US contract drug producer, for $16.5 billion including debt.
Novo Nordisk acquired the company to address bottlenecks in its supply of its appetite suppressing injection.
Novo Nordisk posted annual sales and profit ahead of expectations and boosted its market value over $500 billion last week.
It has already accessed the Catalent sites in Anagni, Italy, in Brussels, and Indiana, where there are a total 3,000 employees.
From 2026, the acquisition will gradually increase Novo Nordisk’s capacity to fill containers.
Elliott Investment Management (the activist hedge fund that is a significant shareholder in Novo Nordisk) has backed the deal which involves the delisting Catalent from New York Stock Exchange.
The chief executive of Novo Nordisk, Lars Fruergaard Jorgensen said that the acquisition “complements our significant investments in active pharmaceutical ingredient facilities and will provide strategic flexibility to the existing supply network”.
Investing in manufacturing is also planned for Ireland, Denmark and France.
Novo Nordisk forecasts another year of double-digit growth in sales, but at a slower pace compared to 2023, as it faces increased competitiveness from Eli Lilly its American rival and periodic supply shortages.
Novo Holdings is the owner of 28 percent of Novo Nordisk shares, listed in Copenhagen. It also holds 77 percent of the voting rights.
Novo Holdings is the asset manager for the Novo Nordisk Foundation. It is also one of the largest investors in life science, having stakes in Convatec (the FTSE 100 medical device company) and Oxford Biomedica (the cell and gene therapy firm), both of which are located in the UK.
The acquisition of manufacturing sites may ease the bottleneck that is preventing the demand for this product.
Kasim Kutay is the chief executive of Novo Holdings. He said: “With Novo’s expertise and track-record in investing in high quality life sciences businesses we believe that Catalent makes a good strategic fit”.
Novo Holdings has agreed to purchase Catalent shares at $63.50 per share, which is a 16.5% premium over the Friday closing price and a 39.1% premium compared to August late when Catalent began a strategic review.
Catalent employs over 18,000 people in more than 50 locations around the world. It has a Swindon site and acquired two years ago the British Government-backed Harwell Science and Innovation Campus.
Novo Nordisk, the French luxury goods conglomerate, was surpassed by LVMH as the most valuable company in Europe last year. This is due to the semaglutide product, sold under the names Ozempic and Wegovy, for the treatment of diabetes, and weight loss.
Wegovy was launched in eight countries after its launch in the US 2021. However, Novo Nordisk had to restrict availability in Britain where the treatment has only been available since September, in a “controlled” and “limited” release.
Barclays analysts said that since supply constraints were the “major barrier” to “unlocking the obesity market”, “the step towards greater vertical integration was a positive”.