Novo Nordisk chief seeks more deals to cement weight-loss lead amid ‘hype’

Novo Nordisk is seeking deals to cement its global lead in weight loss after outlining promising trial results for anti-obesity pills that would extend the Danish drugmaker’s portfolio beyond its injectable Wegovy and Ozempic bestsellers.

Speaking at the company’s headquarters in Bagsværd on the outskirts of Copenhagen, chief executive Lars Fruergaard Jørgensen said potential targets for acquisitions or partnerships included biotech companies with assets in mid-stage trials.

“You can assume that we look at everything or at least most of it,” he said.

David Moore, vice-president for corporate development, added that the company would focus on acquisitions in diabetes and obesity, ideally in the early stage of development.

“Valuations have gone up . . . it’s about making the investments that we believe are going to serve a patient population in the future. The later it is in development, the higher the valuation will be,” said Moore.

The comments came after Novo Nordisk shares hit a record on Thursday, when the Danish group revealed early stage results for an experimental new weight loss pill that appeared to offer better results than its blockbuster Wegovy. Europe’s most valuable company with a market capitalisation of DKr4.1tn ($602.7bn) also said it expected China to approve Wegovy for sale later in 2024.

Investors and analysts are looking for the next producer of “small molecule” drugs — synthetic drugs that are easily reproducible as pills — rather than the complex and usually injectable drugs made from living cells, such as Novo Nordisk’s Wegovy, which imitates a hormone called GLP-1.

Fruergaard Jørgensen said that a tablet product from the acquisition last year of a Canadian biotech, Inversago, could be a scalable weight-loss pill and alternative to the popular GLP-1-based drugs.

“It’s interesting how much interest there is in small molecule GLP-1s. If something has a different name, different combination of letters, by default the interest is lower but we think it’s actually more exciting,” said Fruergaard Jørgensen.

The company is aiming to develop a wide range of drugs and use its manufacturing scale to stay ahead of pharmaceutical rivals seeking to profit from consumer “hype” for weight loss products, he added.

Companies including UK’s AstraZeneca and Swiss group Roche have recently acquired or licensed weight-loss drugs in an effort to enter a market that analysts expected would exceed $100bn by 2030.

But the companies do not have a history of protein manufacturing used by Novo Nordisk and its US rival Eli Lilly to make their diabetes and weight-loss products.

Fruergaard Jørgensen warned that new entrants faced a long road to catch up with Novo Nordisk and its US rival Eli Lilly, because of the innovation required to develop safe, effective products and the manufacturing power needed to market them.

“There are many companies that can build space over time. They might not go as wide or as broad as the two companies that have been in this for 100 years,” he said.

“For a new entrant . . . getting a small space of this in the low end of the market is better than not being there,” he added.

The company has struggled with its own supply issues. It recently acquired three sites from contract manufacturer Catalent for $11bn to enhance its ability to fill injection pens, as part of a three-way deal led by its controlling shareholder Novo Holdings.

Fruergaard Jorgensen also said that Novo Nordisk’s efforts to develop some of its oral drugs would require much more active pharmaceutical ingredient than injectables. The company also believes some users would prefer once weekly injections to daily pills.

“If you look at how we are scaling up API capacity, we’re scaling to serve many more patients,” he said. “The more we go oral, the less we can give injectables.”