CMO free? Novo Nordisk investing $760m in homegrown network
For 2015, capital expenditure at the Denmark-based biopharma firm is expected to be around DKK 5bn ($760m), CEO Jesper Brandgaard said in a conference call to discuss end-of-year results Friday.
This will be “primarily related to investments in the expansion of manufacturing capacity for biopharmaceutical products, expansion of insulin filling capacity, additional capacity for insulin API production as well as construction of new research facilities,” he told investors.
Company spokesman Mike Rulis told Biopharma-Reporter.com his CEO’s comments reflected a gradual expansion of the firm’s network to support the manufacture of its diabetes products, which includes Victoza – a GLP-1 therapy for type 2 diabetes – and long acting basal insulin Tresiba.
“We completed a large [insulin-producing] plant in China which went online about three years ago and we have seen frequent expansions there, as well as sites in the US, France, Brazil and Denmark,” he said, adding these “strategic plants” are able to supply multiple products to multiple countries. Over $100m was invested in an insulin purification plant in Denmark last year.
Furthermore, last August the company acquired a facility in West Lebanon, New Hampshire, from Olympus Biotech and some of the $760m will be used to refit the site to commercially manufacture Novo Nordisk’s haemophilia treatment pipeline. The site is expected to begin operations later this year.
Novo Nordisk is unique among the Big Pharma companies in the fact it manufactures nearly all of its products in-house.
“Some components for device systems are outsourced,” Rulis told us, “and the API for one of our smaller products is in-licensed [Prandin, a tablet for type 2 diabetes, made by Boehringer Ingelheim],” but everything else is made by Novo Nordisk.
“It serves us well as we can apply and control our same systems such as IT and quality globally,” he continued, and, when asked about the problem of over-capacity experienced by a number of other Big Biopharma firms, said the strategy of gradual expansion has meant it has never been in such a situation.
For the full year, sales stood at DKK 89bn ($14bn), up 6% year-on-year, comprising of DKK 42bn worth of sales of modern insulin products (up 9%) and DKK 13bn for Victoza (up 15%).