Latest insulin injection sees Novo Nordisk pump $117m in Danish plant

A plant in Kalundborg that makes “around half of the world’s insulin” will benefit from another upgrade and expansion, says Novo Nordisk.

Novo Nordisk’s site in Kalundborg, about 100 km west of Danish capital Copenhagen, has been making insulin products for over 50 years.

Image: iStock/PashaIgnatov

The firm has heavily invested in production at the site over the past few years, and this latest expansion announced Friday sees a further DKK 800 million ($117 million) in upgrading and expanding facilities there.

“Part of the investment is related to the rebuild of an existing facility,” spokesperson Kristine Kruse Zeij told this publciation.

“Another part of the investment is related to the establishment of a new extension equivalent of 1,400 square meters in three-storey building.”

She added the investment will support future production of a “range of products for diabetes treatment” along with “the future generation of diabetes products.”

The firm expects the projects to be completed in 2022.

For a journalist working off a press release, the investment feels a lot like Groundhog Day.

Ten months ago, very similar plans were unveiled at the site. While the investment was lower – DKK 650 million – Novo Nordisk stated the same reasons for the investment, namely to rebuild certain facilities “to allow the site to meet future production needs of next generation diabetes products.”

“This investment in our production facilities highlights our ambition to continue strengthening our presence in Denmark and Kalundborg. Today, we manufacture around half of the world’s insulin in Kalundborg where we have been present for 50 years,” said Michael Hallgren, senior vice president for Novo Nordisk production in Kalundborg regarding the latest investment, in a near identical statement to last year.

He did update the tally of investment at the site since the turn of the millennium alone, which now stands at DKK 16 billion ($2.14 billion).

Insulin sales

For 2019, Novo Nordisk reported total sales within its Diabetes and Obesity care unit of DKK 103 billion ($14 billion. Insulins pulled in DKK 59.6 billion, which was flat year-on-year due to decreased US sales fell countering increased sales elsewhere.

On a call discussing results, CEO Lars Fruergaard Jørgensen attributed the US decline to several factors.

Firstly, the growth of the market has come down as alternatives to insulin enter the market, specifically GLP-1s which he said are growing by 30%.

“And then in the US, you have a situation where there’s a number of products competing against each other. So for 2020, we see an overall unchanged competitive situation where there’s an opportunity for buyers to play out the companies against each other and that leads to a continued erosion of value of the market,” he told investors.

“Then, you have some coming in trying to capture the Medicaid market, and we see there’s a play in price there. It doesn’t change from a financial point of view a whole lot because that’s a segment that is close to 100% rebated.”