Novo picks Clayton, NC, for its first U.S. API plant

Novo Nordisk ($NVO) has had filling, packaging and prefilled device manufacturing in Clayton, NC, for years. Now the Danish drugmaker is betting its manufacturing future on the site. It will spend $1.2 billion on its first-ever U.S. API plant there and double the site's employment by adding 700 jobs.

The drugmaker Wednesday said the new plant will manufacture the active ingredients for oral semaglutide, its experimental, daily oral treatment for Type 2 diabetes, as well as other current and future Novo insulin products. The company also will create a new production facility in Måløv, Denmark, for tableting and packaging of oral semaglutide as well as other future oral products. The $800 million investment in Måløv will create roughly another 100 jobs there.

Between the Clayton plant and expansion it has done at Novo's massive site in Kalundborg, Denmark, where it employes 2,800 employees, the company said it will have sufficient API capacity for diabetes products well into the next decade.

Novo's U.S. operations president Jesper Høiland

"It is a huge investment and the first time we are considering making one outside of Denmark on a big scale," Jesper Høiland, president of Novo's U.S. operations, said in a telephone interview Wednesday. "The U.S. represents half of Novo's business and is a growing market for us."

Høiland said that Novo has done well with the facilities it already has in Clayton and likes the workforce available there, noting more than 20% of Novo employees at Clayton have a military background that he said is particularly suited to the work.

The company also is expecting some financial incentives from the state for the project, which the News & Observer said could add up to $18.6 million. It expects the facilities to be operational in 2020.

Novo has been in a building mode in the last few years, adding a $100 million purification pilot plant at its new research and development facility in Bagsværd, Denmark, and a $100 million insulin plant in Russia. But while it is also expanding globally, it says it expects most of the sales from its new diabetes treatments to come from the U.S. market.

The drugmaker last month reported positive data from its first Phase IIIa trial of the daily oral version of semaglutide. A so-called GLP-1 drug, it acts as an analog of the hormone GLP-1 to promote the body's natural production of insulin, spurring weight loss and relieving the symptoms of Type 2 diabetes. In a separate announcement Wednesday, Novo laid out its Phase III plan, with trials to get underway next year and eventually providing data from 8,000 patients.

Assuming that Phase III trials continue to bear out its benefits, Høiland said it will be a very important product to Novo. "It will be the pinnacle to our future way of doing business in terms of treatment and injections," he said. "U.S. will remain key to Novo and we are here to stay."

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