By Dominic Chopping
The success of Novo Nordisk's blockbuster weight-loss and diabetes drugs will help boost income at the company's controlling shareholder, allowing it to invest up to $7 billion a year by 2030.
Novo Holdings, which manages the assets and wealth of the philanthropic Novo Nordisk Foundation, invests in life science companies as well as managing a portfolio of equities, bonds, real estate and infrastructure assets, including controlling stakes in Novo Nordisk and enzyme maker Novonesis.
It had an investment portfolio of around $26 billion at year-end 2022 and invested $3 billion in 2023, but helped by rising income from its investments, including its 28% stake in Novo Nordisk, it plans to invest $5 billion each in the next five years before raising to $7 billion a year by 2030.
Novo Nordisk saw its overall sales jump 31% in 2023 from the previous year and expects further growth of 18% to 26% this year, fueled by surging demand for its hit diabetes and weight-loss drugs Ozempic and Wegovy.
With demand for the drugs far outstripping supply, Novo Nordisk has been forced to limit supplies while it commits cash to boosting production capacity.
Last week, Novo Holdings agreed to buy New York-listed contract manufacturer Catalent in a deal worth $16.5 billion and said it will sell three Catalent manufacturing sites to Novo Nordisk for $11 billion.
The deal will initially see Novo Nordisk honor existing contracts at the sites to manufacture products for others, before primarily focusing on producing its own drugs.
Catalent has more than 50 sites and fits Novo Holding's mandate to invest in life sciences companies for the benefit of the Novo Nordisk Foundation's mission and philanthropic causes, it said. Selling off further parts of Catalent isn't part of its core thesis though.
"The addressable market opportunity is significant in the areas in which Catalent operates, and we believe there is additional value to be unlocked in the business," Christoffer Soderberg, Managing Partner, Principal Investments, at Novo Holdings said in an emailed statement.
Write to Dominic Chopping at email@example.com
(END) Dow Jones Newswires