Ozempic Maker Novo Nordisk Invests $2.3 Billion In France Site

(Bloomberg) -- Novo Nordisk A/S plans to invest €2.1 billion ($2.3 billion) to expand production in France as it works to meet surging demand for its sought-after weight-loss medicines. 

The construction work to beef up the Danish company’s site in Chartres, southwest of Paris, has already started, Novo said in a statement. The investment will increase capacity for the diet drug Wegovy and its sister product for diabetes, called Ozempic. 

Novo is racing to build out factories and production lines as competition intensifies in a weight-loss market estimated to reach $100 billion by the end of the decade. For French President Emmanuel Macron, who will travel to Chartres Thursday, spurring a reversal of the country’s industrial decline has been a key economic goal. 

The factory makes pre-filled injector pens, which patients need to use Ozempic and Wegovy, as well as insulin. 

The investment will more than double the site’s footprint and create more than 500 new jobs, Novo said. 

The frenzy around the drugs, endorsed by celebrities and entrepreneurs including Elon Musk, turned Novo into Europe’s most valuable company, sending its stock up by about half this year. The shares were little changed in Copenhagen on Thursday. 

Earlier this month, the drugmaker unveiled a plan to invest more than $6 billion to build a 170,000 square-meter manufacturing facility in Denmark.

Novo has faced shortages of Ozempic and Wegovy, with some diabetes patients struggling to stay on treatment. Both medicines contain the same active ingredient, semaglutide, which mimics the action of a gut hormone and makes people feel full. 

Few Countries

Wegovy has been shown to help users shed about 15% of their body weight on average, and recent studies also demonstrated heart benefits. Novo has so far only introduced the drug in a handful of countries. Access in France was first restricted to morbidly obese patients with another risk factor such as heart disease or sleep apnea, and the treatment hasn’t officially launched there. 

Read More: The Weight-Loss Drug Frenzy Is Outrunning the Company Behind It

Macron laid out a series of measures earlier this year to revive French industry, including expanded use of tax credits for investment and streamlining procedures to open new factories.

A Macron aide didn’t immediately respond to a question on whether the €2.1 billion investment includes public subsidies. 

France’s attractiveness as a place to invest may also get a boost from a court decision in Germany last week. That country’s government was forced to put in an emergency spending freeze as it assesses the implications from the court’s ruling that some €60 billion couldn’t be transfered to a fund aimed at supporting a range of industrial projects.

Read More: German Budget Chaos Puts Industry’s Green Overhaul at Risk

Thursday’s news comes on top of a €130 million investment into expanding capacity in Chartres that Novo announced in January. The site currently employs more than 1,500 people and produces insulin used by more than eight million patients worldwide.

(Updates with details on factory from second paragraph)

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