Novo Nordisk needs to make significant investments in production capacity to meet the growing global demand for its products.
The Danish multinational pharmaceutical company, which released its 2023 annual report on Wednesday, reported a 31% year-on-year increase in sales to Danish kroner 232.3 billion (US$37.8 billion). Operating profit for the year increased by 37% to DKK 102.6 billion, and EBITDA increased by 36% to DKK 112 billion.
The company expects sales to rise again by 18% to 24% in 2024, but highlights the risks of meeting demand due to current production capacity limitations.
“It is a top priority for Novo Nordisk to address the supply issues that prevent us from meeting the growing demand for our products,” the report said. “We know we need to do more to increase production capacity.”
And we are working on that challenge. Last year, the company announced investments totaling more than DKK 75 billion to expand capacity across its global network of production sites, including facility expansions in Denmark and France and the acquisition of a brownfield development and production site in Ireland.
Expand sales
Sales growth in 2023 was driven by a 50% increase in North America and a 147% increase in anti-obesity products Wegovy and Saxenda. Wegovy’s global sales amounted to DKK 31.3 billion (DKK 6.1 billion in 2022), with the US contributing DKK 29.4 billion, up from DKK 6.1 billion in 2022.
Sales of the North American business increased by 60% (measured in Danish kroner, 67% in CER) in the third quarter of 2023 compared to the third quarter of 2022. These numbers were driven by obesity care sales and GLP-1 diabetes sales, which increased 151% at CER. 73% increase on a CER basis.
Novo Nordisk shares soared following the announcement, hitting a high of DKK 776.50 in early trading on the Nasdaq Copenhagen. The closing price on January 30th was 748.20DKK. The last one cited was DKK753.