|Novo CEO Lars Rebien Sørensen|
Denmark's Novo Nordisk ($NVO) has filling, packaging and a device manufacturing in the U.S., but when it comes to its insulin API production, it has kept that close to home. But CEO Lars Rebien Sørensen says it looks like it might be time to open its first plant in the U.S.
The drugmaker has had promising results from its first Phase IIIa trial of a new daily oral version of its once-a-week injectable semaglutide for Type 2 diabetes. Assuming approval, Novo expects most of the sales would be in the U.S. While Sørensen tells Bloomberg that Novo has not ruled out a site in Europe, there is a certain level of expectation from payers and regulators that it would have manufacturing in the U.S.
"There are good arguments for globalizing our manufacturing, but it's a big step for us, because we do not have active insulin and GLP-1 competencies in the U.S. or elsewhere," Sørensen told the news service.
Right now, Novo's only API manufacturing occurs at its plant in Kalundborg, Denmark, which claims to makes half the insulin used by diabetics around the world. But to meet its growth projections, it has said it needs to double insulin production over the next decade and there is good reason to have some of that in the U.S. It would help the company recruit talent, and it would also allow the drugmaker to smooth out some of the foreign exchange effects on its financials. The company this month reported that its net profit swung to a loss of 3.3 billion Danish kroner ($493 million) because of a loss on foreign exchange hedging. It said that investors can expect that to nearly double to a net financial loss of $850 million for the year.
"If we globalize our manufacturing system," Sørensen told Bloomberg, "it creates a natural hedge in that we get a more comparable cost picture to our currency picture."
Sørensen will have to make up its mind soon, however, because Novo will have to get manufacturing specs approved by regulators, and it will take about 5 years to get a plant up and running.
- read the Bloomberg story
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