Novo Nordisk announced that its popular weight-loss drug, Wegovy, has been approved for use in China, the world’s second-largest economy with the highest number of overweight or obese people. The company will provide details on pricing and availability upon launch and initially target patients willing to pay out-of-pocket. Despite the approval, Novo faces challenges, including potential patent expirations in less than two years and competition from local drugmakers developing generic versions.
The approval of Wegovy in China is significant given the country’s growing obesity problem, with projections estimating 540 million overweight adults by 2030. Novo’s shares rose 1.5% following the news, reaching record highs. However, Novo’s semaglutide patent, the key ingredient in Wegovy, may expire sooner in China than in other regions, potentially limiting its market advantage. Additionally, booming demand for Wegovy has led to capacity shortages, necessitating further investments to meet global demand.
Novo is also contending with competition from Eli Lilly, whose diabetes drug tirzepatide was recently approved in China. Both companies are increasing production to meet the expanding weight-loss market, projected to reach $100 billion globally by the end of the decade. Novo recently announced a $4.1 billion investment in a U.S. facility to support production of Wegovy and its diabetes drug Ozempic, which saw significant sales growth in China last year.
Source: Reuters