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 if the corporate isn’t fairly a family identify, the TV jingle for its best-selling drug — “Oh-oh-ohhh, Ozempic!” — may ring in your ears. Across the United States, Novo Nordisk’s diabetes and weight-loss medicine, Ozempic and Wegovy, have soared to celeb standing and helped make the corporate Europe’s most beneficial public agency. It can’t make sufficient of the medicine.
Mr. Jorgensen’s downside is one many prime executives wouldn’t thoughts, however the success caught him off guard. Last 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.
“Nobody had forecast this growth — no analyst, nobody in the company,” Mr. Jorgensen mentioned in a latest interview on the firm’s headquarters in a suburb of Copenhagen. “Nobody forecast a 100-year-old company would grow more than 30 percent,” he mentioned, seemingly torn between satisfaction and amazement.
For most of its 100 years Novo Nordisk has been targeted on the regular enterprise of treating diabetes, one of many world’s most prevalent power ailments. Even at this time, it produces half the world’s insulin. But the event of Ozempic and Wegovy has led to a much bigger and bolder ambition to “defeat serious chronic diseases.” That consists of 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 the United States alone, greater than 40 p.c of adults are overweight.
And so the Danish drugmaker is present process huge adjustments — 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 satisfy the large demand for its weight-loss medicine, keep forward of competitors from Eli Lilly and others and make sure the firm’s future so it may meet its lofty purpose.
But in all of the tumult, there’s something executives try to carry on to: the corporate’s longstanding values, codified within the “Novo Nordisk Way.”
Those ideas, which embody having a “patient-centered business approach,” have helped earn the corporate an excellent fame at residence, the place it’s thought-about a spot the place individuals are proud to work. But these guideposts are dealing with stress as tens of 1000’s of recent workers are employed, lawmakers denounce the drugmaker for its excessive costs and counterfeit variations of its merchandise make individuals 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 manager staff share an open-plan workplace house.
“Many of us have been here forever,” Mr. Jorgensen, 57, mentioned as a snowstorm gathered power exterior.
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 underneath pressure: “Three profit warnings in one year, and the share price had tanked by 40 percent,” he recalled.
About a 12 months later, Ozempic hit the market.
Now Novo Nordisk constantly beats investor expectations. Last summer time, it eclipsed the French luxurious group LVMH Moët Hennessy Louis Vuitton to develop into Europe’s most beneficial firm. Its market worth exceeds $555 billion.
For these on the sixth ground, who rose by way of the ranks of an organization that targeting insulin, the adjustments are coming shortly.
“Now it’s new patients; a new product presentation; sometimes new molecules,” Mr. Jorgensen mentioned. “It’s a completely different, say, management system and supply chain that’s required.”
The coronary heart of the expansion is semaglutide, Novo Nordisk’s artificial model of a hormone often called 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 individuals to really feel fuller after they eat and reduces cravings. Physicians say it may revolutionize the best way 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. And then insulin began drying up as a supply of income, as U.S. lawmakers pushed value caps and drugmakers had been pressured to pay bigger rebates.
Ozempic, the model identify for semaglutide, a weekly injection for Type 2 diabetes sufferers, has been round for greater than six years. But within the final couple of years, there was an explosion in recognition, helped alongside by heavy promoting, social media movies and intrigue over celeb 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 a couple of billion views, with individuals 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 time it was accepted by the Food and Drug Administration in mid-2021, the Danish firm knew it had “something special,” mentioned Camilla Sylvest, the manager vp for industrial technique and company affairs.
Novo Nordisk leads the pack in weight problems therapy, however it now has robust competitors from Eli Lilly, which sells an identical drug underneath the model names Mounjaro, for diabetes, and Zepbound, for weight reduction. Other 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 within the United States. That’s partly as a result of medicine are typically launched first within the United States.
That means the Danes primarily have Americans to thank for his or her financial progress. The enlargement of the pharmaceutical business, largely resulting from Novo Nordisk, was accountable for all of Denmark’s financial progress final 12 months.
High Prices, Loud Criticism
The price of those medicine, although, has made Novo Nordisk a goal.
“There is no rational reason, other than greed, for Novo Nordisk to charge Americans nearly $1,000 a month for Ozempic,” Senator Bernie Sanders, impartial of Vermont, mentioned final month. A frequent critic of excessive drug costs, he mentioned Canadians paid $155 a month and Germans simply $59.
Ozempic could possibly be a “game changer” preventing diabetes and weight problems, Mr. Sanders added, however “this outrageously high price has the potential to bankrupt Medicare, the American people and our entire health care system.”
While the U.S. record value for Ozempic is a little bit underneath $1,000 a month and about $1,350 for Wegovy, Novo Nordisk says most American sufferers pay $25 or much less for Wegovy. Much of the remainder of the fee is shouldered by insurance coverage, and a few have been overwhelmed. This month, dealing with ballooning prices, North Carolina give up offering insurance coverage protection for weight problems medicine for state workers. 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 medicine to finish weight problems in the end get monetary savings. “Health care systems are challenged, with aging populations,” he mentioned. “They’re going to break unless we do something about obesity.”
The Novo Nordisk Way
Although the corporate’s manufacturing amenities function 24 hours a day, one year a 12 months, the restricted provide of Ozempic and Wegovy is anticipated to final for a number of extra years, worrying diabetics whereas counterfeits are leaking into the market.
Production capability is a recurring headache. Novo Nordisk has greater than 64,000 workers, and visitors jams exterior its buildings are frequent. At the headquarters in Bagsvaerd, arrivals after 9 a.m. may battle to discover a desk.
So Novo Nordisk is in the midst of remaking itself. Cranes and building staff have descended on its websites because it spends greater than $6 billion this 12 months to increase manufacturing, practically 4 occasions the quantity it spent simply two years in the past. The firm is shopping for extra manufacturing websites and vacuuming up workplace house in Denmark.
More than 10,000 individuals 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 be making an attempt to remodel the mind-set throughout 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 own self-limiting beliefs that could trigger you, block you, in actually daring to lead in a different environment?”
Since then, greater than 400 managers have been by way of this program, supposed to assist them sustain with the corporate’s sudden progress.
Until drug provides can higher match demand, the corporate says, it must make troublesome decisions about how one can decide who will get what’s obtainable.
Ms. Sylvest says right here she is guided by the Novo Nordisk Way, launched within the late Nineties. It consists of 10 ideas, like “we are curious and innovate for the benefit of patients and society at large” and “we build and maintain good relations with our stakeholders.”
“One way or the other,” she mentioned, “it always helps us to have these essentials about what’s the right thing to do.”
Novo Nordisk, she added, doesn’t wish to simply promote the place costs are highest — the United States — however increase entry internationally for low-income individuals or these with inadequate insurance coverage, whereas additionally preserving present sufferers on the prime of the record.
Hundreds of Millions of Potential Patients
Until just lately, weight problems medicine had a dire historical past, together with when Fen-Phen needed to be pulled off cabinets within the late Nineties for inflicting critical coronary heart issues.
Obesity was “a therapeutic graveyard,” mentioned Emily Field, a prescribed drugs analyst at Barclays in London. The medicine both labored effectively and had unhealthy unwanted effects or led to solely middling weight reduction, she mentioned.
But 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, slightly than a failure of willpower and poor weight-reduction plan.
Novo Nordisk is accountable for a few of this altering outlook. Last summer time, a five-year research it financed confirmed that its medicine may scale back the chance of coronary heart assaults, stroke and heart problems. This is “what really got Novo Nordisk on the radar,” Ms. Field mentioned.
That makes a whole lot of hundreds of thousands of individuals potential sufferers. The marketplace for weight problems medicines may develop to $100 billion within the subsequent decade, based on Barclays. So far, Novo Nordisk is treating about 40 million individuals globally with its diabetes and weight-loss remedies.
The End of Obesity?
The U.S. patents on Ozempic and Wegovy don’t expire till 2032, however already Novo Nordisk is engaged on new remedies. It’s in superior improvement of CagriSema, a weekly injection that’s anticipated to be more practical than Wegovy for shedding weight. Last 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 stop weight problems. Can it predict who’s in danger, primarily based on genetics and the information, and deal with them first?
Last 12 months, Novo Nordisk established the Transformational Prevention Unit, an inside staff in search of 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 adverse “underperform” ranking on Novo Nordisk inventory. Peter Welford, an analyst on the financial institution in London, thinks weight problems medicine will develop into frequent and interchangeable, struggling the identical destiny as insulin, with greater volumes and stress on internet costs.
“Ultimately, we think Novo Nordisk needs to diversify,” Mr. Welford mentioned. But the financial institution’s guess that Novo Nordisk’s share value is just too excessive hasn’t labored out up to now.
“Clearly we’ve been wrong,” he mentioned.
