Novo building $100M plant in Denmark in big R&D push

Novo Nordisk is betting big on new diabetes treatments with plans to spend billions of dollars on R&D. That kind of effort necessitates more production capacity for early phase work, and so the drugmaker will spend $100 million on a new facility to facilitate the push.

Novo Nordisk's Bagsværd facility--Courtesy of Novo Nordisk

Novo Nordisk ($NVO) said Friday that it will invest 550 million Danish kroner ($100 million) to build a new purification pilot plant at its new research and development facility in Bagsværd. It is expected to be complete by late 2016. "The new purification pilot plant will significantly increase our capacity for early-phase diabetes projects," Jesper Bøving, senior vice president of Chemistry, Manufacturing and Control Supply (CMC), said in a statement. CMC is a unit within Novo Nordisk R&D. "It will create up to 35 new jobs over a two-year period in addition to the 100 new employees CMC Supply will hire in Denmark in 2014," he said.

The company said it will start with one purification line but that the facility will be built to allow for doubling its size as needed. It said the plant will encompass 2,700 square meters (29,100 square feet) and require 5 kilometers of steel pipes.

Novo Nordisk officials said in October that the company felt strongly enough about growth in the diabetes market to gamble up to $3.7 billion investigating new oral diabetes therapies and next-gen approaches, even as it defends its growing franchise for its Type 2 diabetes treatment Victoza. There are trials for a pill version underway.

Manufacturing is key to development, but Novo knows it can also create issues. In June, the company received a Complete Response Letter (CRL) from the FDA saying that issues at a plant found during an inspection were holding up completion of the review for its recombinant factor XIII compound for a rare bleeding disorder. Novo spokesman Ken Inchausti explained in an email that the "observation was concerning sample sets used for training and certification of operators" and that the company had already responded to the FDA's concerns. He would not say which plant was involved, only that it was not a U.S. facility.

- here's the announcement