Novo Nordisk faces obesity drug shortage

Danish drugmaker Novo Nordisk A/S said it's catching up with demand for its obesity treatment Wegovy by making more of it in-house, brightening sales growth prospects for this year, which had been dented by production issues.

The Danish company still can't keep up with demand after a contract manufacturer had stopped filling syringes with Wegovy due to quality concerns in December. However, Novo has boosted its own production of Wegovy and can supply about 20,000 doses a week, getting closer to the prescription rate that's currently at around 22,000, Chief Executive Officer Lars Fruergaard Jorgenson said Wednesday.

The shares rose as much as 3.9 per cent in Copenhagen after the company repeated it's confident the situation will return to normal in the second half. A 58 per cent gain in the stock over the past year gives the company a market value that exceeds that of Swiss drugmaker Novartis AG.

Novo has said it aims to more than double 2019 obesity drug sales by 2025. Wegovy is a weekly injection launched in June that dampens patients' appetite and can help them to lose about 15 per cent of their body weight. The Danish company also makes the weight loss medication Saxenda, which was launched in the US in 2015 and is expected to lose patent protection in the coming years.

Obesity treatments are seen as a key avenue of growth for Novo, which is known primarily as a diabetes-drug maker. Sales of both drugs rose 55 per cent last year.

In December, Novo bought US-based biotech Dicerna Pharmaceuticals Inc in a $3.3 billion bid to gain RNA technology that promises to yield new medicines. chief financial officer Karsten Munk Knudsen said would consider further acquisitions to boost research capabilities or its pipeline, though the company isn't interested in transformational deals.

A US Senate finance committee said last month that it found evidence that drugmakers including Novo raised their insulin prices around the same time, a practice known as "shadow pricing."