Lars Fruergaard Jorgensen has an issue: Too many individuals need what he’s promoting.
Mr. Jorgensen is the chief govt of Novo Nordisk, the Danish drugmaker. Even when the corporate isn’t fairly a family title, the TV jingle for its best-selling drug — “Oh-oh-ohhh, Ozempic!” — may ring in your ears. Throughout america, Novo Nordisk’s diabetes and weight-loss medication, Ozempic and Wegovy, have soared to movie star standing and helped make the corporate Europe’s most dear public agency. It may well’t make sufficient of the medication.
Mr. Jorgensen’s drawback is one many prime executives wouldn’t thoughts, however the success caught him off guard. Final 12 months, when the corporate was celebrating its centenary, Novo Nordisk’s income jumped by a 3rd, to 232 billion Danish kroner, or $33 billion.
“No one had forecast this development — no analyst, no person within the firm,” Mr. Jorgensen mentioned in a latest interview on the firm’s headquarters in a suburb of Copenhagen. “No one forecast a 100-year-old firm would develop greater than 30 %,” he mentioned, seemingly torn between pleasure and amazement.
For many of its 100 years Novo Nordisk has been centered on the regular enterprise of treating diabetes, one of many world’s most prevalent persistent ailments. Even at this time, it produces half the world’s insulin. However the improvement of Ozempic and Wegovy has led to a much bigger and bolder ambition to “defeat critical persistent ailments.” That features treating, and even stopping, weight problems, which is linked to different well being points like coronary heart and kidney ailments.
By pursuing a a lot bigger goal than diabetes, the corporate expects to unlock the door to a multibillion-dollar market with practically a billion potential sufferers. In america alone, greater than 40 % of adults are overweight.
And so the Danish drugmaker is present process huge modifications — it’s getting larger, extra worldwide and nearer to the warmth of the highlight. Mr. Jorgensen is making an attempt to ramp up manufacturing to fulfill the large demand for its weight-loss medication, keep forward of competitors from Eli Lilly and others and make sure the firm’s future so it may possibly meet its lofty objective.
However in all of the tumult, there’s something executives are attempting to carry on to: the corporate’s longstanding values, codified within the “Novo Nordisk Approach.”
These rules, which embody having a “patient-centered enterprise method,” have helped earn the corporate an excellent status at house, the place it’s thought-about a spot the place individuals are proud to work. However these guideposts are going through strain as tens of 1000’s of recent staff are employed, lawmakers denounce the drugmaker for its excessive costs and counterfeit variations of its merchandise make folks sick.
#Ozempic
The drugmaker’s head workplace is a homage to its roots: a contemporary six-story white round constructing impressed by the molecular construction of insulin. A staircase spirals round an open atrium. On the highest ground, Mr. Jorgensen and the chief group share an open-plan workplace area.
“Many people have been right here ceaselessly,” Mr. Jorgensen, 57, mentioned as a snowstorm gathered energy outdoors.
He’s labored at Novo Nordisk for greater than three a long time, and have become chief govt in 2017, a turbulent interval when the insulin market was beneath pressure: “Three revenue warnings in a single 12 months, and the share value had tanked by 40 %,” he recalled.
A few 12 months later, Ozempic hit the market.
Now Novo Nordisk persistently beats investor expectations. Final summer time, it eclipsed the French luxurious group LVMH Moët Hennessy Louis Vuitton to turn out to be Europe’s most dear firm. Its market worth exceeds $555 billion.
For these on the sixth ground, who rose by means of the ranks of an organization that targeting insulin, the modifications are coming rapidly.
“Now it’s new sufferers; a brand new product presentation; generally new molecules,” Mr. Jorgensen mentioned. “It’s a totally completely different, say, administration system and provide chain that’s required.”
The center of the expansion is semaglutide, Novo Nordisk’s artificial model of a hormone generally known as glucagon-like peptide 1, or GLP-1, which helps the physique regulate blood sugar ranges. The patent developed by the corporate additionally proved remarkably efficient for weight reduction. It causes folks to really feel fuller after they eat and reduces cravings. Physicians say it may revolutionize the way in which we take into consideration weight problems and what we eat; meals executives concern the identical factor.
Semaglutide revived the fortunes of Novo Nordisk. A few a long time in the past, the corporate was falling behind worldwide friends, with failed insulin medical trials and too little innovation. After which insulin began drying up as a supply of income, as U.S. lawmakers pushed value caps and drugmakers had been compelled to pay bigger rebates.
Ozempic, the model title for semaglutide, a weekly injection for Sort 2 diabetes sufferers, has been round for greater than six years. However within the final couple of years, there was an explosion in recognition, helped alongside by heavy promoting, social media movies and intrigue over movie star use. Elon Musk mentioned he used it, and on the Oscars final 12 months Jimmy Kimmel made a gag about it. TikTok movies tagged Ozempic have multiple billion views, with folks documenting their weight reduction.
As Ozempic started to take off, Novo Nordisk pushed forward with Wegovy, which is semaglutide marketed particularly for weight reduction. By the point it was authorised by the Meals and Drug Administration in mid-2021, the Danish firm knew it had “one thing particular,” mentioned Camilla Sylvest, the chief vice chairman for industrial technique and company affairs.
Novo Nordisk leads the pack in weight problems therapy, but it surely now has robust competitors from Eli Lilly, which sells an analogous drug beneath the model names Mounjaro, for diabetes, and Zepbound, for weight reduction. Different pharmaceutical firms are clambering to catch up.
By far, most individuals utilizing Ozempic (two thirds of its gross sales final 12 months) and Wegovy (practically all of its gross sales) are in america. That’s partly as a result of medication are typically launched first in america.
Meaning the Danes primarily have People to thank for his or her financial development. The growth of the pharmaceutical trade, largely as a consequence of Novo Nordisk, was liable for all of Denmark’s financial development final 12 months.
Excessive Costs, Loud Criticism
The price of these medication, although, has made Novo Nordisk a goal.
“There is no such thing as a rational purpose, apart from greed, for Novo Nordisk to cost People practically $1,000 a month for Ozempic,” Senator Bernie Sanders, unbiased of Vermont, mentioned final month. A frequent critic of excessive drug costs, he mentioned Canadians paid $155 a month and Germans simply $59.
Ozempic might be a “recreation changer” preventing diabetes and weight problems, Mr. Sanders added, however “this outrageously excessive value has the potential to bankrupt Medicare, the American folks and our complete well being care system.”
Whereas the U.S. record value for Ozempic is somewhat beneath $1,000 a month and about $1,350 for Wegovy, Novo Nordisk says most American sufferers pay $25 or much less for Wegovy. A lot of the remainder of the associated fee is shouldered by insurance coverage, and a few have been overwhelmed. This month, going through ballooning prices, North Carolina give up offering insurance coverage protection for weight problems medication for state staff. Even Denmark’s nationwide well being service gained’t subsidize Wegovy, arguing that it isn’t price efficient.
Mr. Jorgensen argues that prime charges of weight problems result in huge medical prices, and that medication to finish weight problems finally lower your expenses. “Well being care techniques are challenged, with getting old populations,” he mentioned. “They’re going to interrupt except we do one thing about weight problems.”
The Novo Nordisk Approach
Though the corporate’s manufacturing services function 24 hours a day, 12 months a 12 months, the restricted provide of Ozempic and Wegovy is predicted to final for a number of extra years, worrying diabetics whereas counterfeits are leaking into the market.
Manufacturing capability is a recurring headache. Novo Nordisk has greater than 64,000 staff, and site visitors jams outdoors its buildings are widespread. On the headquarters in Bagsvaerd, arrivals after 9 a.m. may battle to discover a desk.
So Novo Nordisk is in the course of remaking itself. Cranes and development employees have descended on its websites because it spends greater than $6 billion this 12 months to broaden manufacturing, practically 4 instances the quantity it spent simply two years in the past. The corporate is shopping for extra manufacturing websites and vacuuming up workplace area in Denmark.
Greater than 10,000 folks had been employed final 12 months globally, and the corporate is changing into extra worldwide — particularly American — because it expands analysis workplaces in Cambridge, Mass., and buys smaller biotech firms.
Mr. Jorgensen can also be making an attempt to remodel the mind-set inside the firm. A few years in the past, he gathered executives on a retreat for coaching referred to as NNX, for Novo Nordisk Unknown. The important query, he mentioned: “What are your individual self-limiting beliefs that would set off you, block you, in truly daring to guide in a distinct surroundings?”
Since then, greater than 400 managers have been by means of this program, supposed to assist them sustain with the corporate’s sudden development.
Till drug provides can higher match demand, the corporate says, it must make tough decisions about methods to decide who will get what’s out there.
Ms. Sylvest says right here she is guided by the Novo Nordisk Approach, launched within the late Nineteen Nineties. It contains 10 rules, like “we’re curious and innovate for the advantage of sufferers and society at giant” and “we construct and preserve good relations with our stakeholders.”
“Someway,” she mentioned, “it all the time helps us to have these necessities about what’s the correct factor to do.”
Novo Nordisk, she added, doesn’t wish to simply promote the place costs are highest — america — however broaden entry internationally for low-income folks or these with inadequate insurance coverage, whereas additionally holding present sufferers on the prime of the record.
A whole bunch of Tens of millions of Potential Sufferers
Till lately, weight problems medication had a dire historical past, together with when Fen-Phen needed to be pulled off cabinets within the late Nineteen Nineties for inflicting critical coronary heart issues.
Weight problems was “a therapeutic graveyard,” mentioned Emily Subject, a prescribed drugs analyst at Barclays in London. The medication both labored effectively and had unhealthy uncomfortable side effects or led to solely middling weight reduction, she mentioned.
However the science has modified quickly, together with public opinion on weight problems, which is more and more understood to be a illness that may be medically handled, fairly than a failure of willpower and poor food plan.
Novo Nordisk is liable for a few of this altering outlook. Final summer time, a five-year research it financed confirmed that its medication may cut back the chance of coronary heart assaults, stroke and heart problems. That is “what actually acquired Novo Nordisk on the radar,” Ms. Subject mentioned.
That makes a whole bunch of thousands and thousands of individuals potential sufferers. The marketplace for weight problems drugs may develop to $100 billion within the subsequent decade, in line with Barclays. Thus far, Novo Nordisk is treating about 40 million folks globally with its diabetes and weight-loss therapies.
The Finish of Weight problems?
The U.S. patents on Ozempic and Wegovy don’t expire till 2032, however already Novo Nordisk is engaged on new therapies. It’s in superior improvement of CagriSema, a weekly injection that’s anticipated to be simpler than Wegovy for shedding weight. Final month, its inventory value spiked after early trial outcomes for an oral pill of one other weight-loss therapy.
As the corporate digs deeper into weight problems, which is outlined as having a physique mass index above 30, the subsequent query is whether or not the Danish drugmaker can forestall weight problems. Can it predict who’s in danger, primarily based on genetics and the info, and deal with them first?
Final 12 months, Novo Nordisk established the Transformational Prevention Unit, an inside group on the lookout for methods to foretell and stop weight problems.
Not everyone seems to be shopping for the hype. For greater than 4 years, Jefferies has had a damaging “underperform” score on Novo Nordisk inventory. Peter Welford, an analyst on the financial institution in London, thinks weight problems medication will turn out to be widespread and interchangeable, struggling the identical destiny as insulin, with increased volumes and strain on web costs.
“Finally, we expect Novo Nordisk must diversify,” Mr. Welford mentioned. However the financial institution’s guess that Novo Nordisk’s share value is just too excessive hasn’t labored out to date.
“Clearly we’ve been improper,” he mentioned.
