Novo Nordisk's Wegovy weight loss treatment has been approved for long-term weight management in China.

This paves the way for the blockbuster drug to be sold to individuals with obesity and at least one weight-related comorbidity.

It is noteworthy that more than half of China's 1.4 billion population is overweight or obese.

The approval was obtained because the patent on semaglutide, the active ingredient of the drug, will expire in China in 2026.

Additionally, approximately 15 generic versions of Ozempic and Wegovy are currently being developed in China. Novo Nordisk's Ozempic diabetes drug, approved in 2021, doubled its sales in most of China last year, and its path is even clearer with Wegovy.

High demand for Wegovy, especially in the United States and other markets where it was launched, pushed Novo's shares to record levels.

But this success also led to supply shortages, necessitating restrictions on the number of patients receiving weekly injections.

Novo Nordisk is actively working to increase its in-house capacity for fill-to-finish production of injection pens at its various facilities in the United States and Europe.

The urgency to increase production of Wegovy has increased since Eli Lilly launched its own obesity drug, Zepbound, in the US last December.

Both companies are struggling to keep up with growing demand, and some experts predict annual sales for obesity treatments could reach $150 billion by the early 2030s.

Novo Nordisk is investing $4.1 billion to build a new manufacturing facility in Clayton, North Carolina. The facility aims to increase the supply of blockbuster weight-loss drug Wegovy and diabetes treatment Ozempic, as well as other injectable treatments.

Construction is expected to be completed between 2027 and 2029, employing 1,000 workers in addition to the current 2,500 employees at Novo's other manufacturing facilities in North Carolina

Additionally, controlling shareholder Novo Holdings recently announced the acquisition of US-based contract pharmaceutical manufacturer Catalent, which is involved in the production of Wegovy, for $16.5 billion.

Novo Holdings announced that it will sell Catalent's three filling facilities in Italy, Belgium and the USA to Novo Nordisk after the deal is completed.

The initial focus will be on the production of Wegovy and Ozempic, but production lines may also support other drugs in the future.

My comment: Novo Nordisk is a leader in the market and will strengthen its position, especially with the developments in China.

However, if we take into account those who want to take advantage of the gap that has arisen because the crazy increase in demand has not been fully met and, of course, those who want to create a price advantage, equivalent drugs have increased recently.

Increasing production capacity will especially benefit the flagship products Wegovy and Ozempic, thus making Novo Nordisk indispensable.

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