Danish pharmaceutical major Novo Nordisk (NYSE:NVO) plans to invest over DKK 42 billion ($6 billion) for the expansion of its current manufacturing facilities in Kalundborg, Denmark.
The planned expansion in the company’s chronic diseases portfolio is expected to create additional manufacturing capacity in active pharmaceutical ingredients (API) for NVO. Further, the new facility will be designed with future processes in mind to help the company meet future market demands.
The projects are expected to be finalized from the end of 2025 through 2029. The company has already announced production investments worth DKK 40 billion in Denmark over the past two years.
Impressively, the investment comes amid robust demand for weight loss drugs, particularly Novo Nordisk’s anti-obesity drug Wegovy. Obesity drugs are expected to cross annual sales of $100 billion globally, according to Reuters.
With an eye on diabetes and obesity, AstraZenenca (NASDAQ:AZN) has announced a $2 billion licensing deal for China-based Eccogene’s investigational candidate ECC5004, which is targeted for the treatment of type-2 diabetes, obesity, and other cardiometabolic conditions.
During the first nine months of 2023, NVO’s diabetes and obesity products continued to track well, with Ozempic sales increasing by 53% to DKK 65.7 billion and Wegovy sales surging 481% to DKK 21.7 billion. Driven by volume gains in Diabetes and Obesity care, Novo Nordisk expects a healthy sales growth of between 32% and 38% for Fiscal Year 2023.
What is the Price Forecast for NVO Stock?
Overall, the Street has a Strong Buy consensus rating on Novo Nordisk. After a massive 75% rally in its share price over the past year, the average NVO price target of $108.50 implies a modest 8.5% potential upside.
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