Boosting Novo Nordisk's Manufacturing: A Huge Deal One Step Closer to Closing

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Wegovy and Ozempic, the blockbuster weight loss drug and diabetes treatment, respectively, have taken a significant step closer to improvement in supply.

Last week, the Danish drugmaker's parent company, Novo Holdings, received approval from European antitrust regulators to proceed with its $16.5 billion acquisition of U.S.-based drug manufacturer Catalent, despite opposition from rival drugmakers and politicians.

The FTC is the final obstacle for Novo Holdings to finalize the massive deal, which was announced in February. The companies anticipate the transaction to close by the end of the month.

Novo Holdings, which owns 77% of the voting shares in Novo Nordisk, sees Catalent as an attractive buyout target.

The acquisition of three Catalent sites by Novo Nordisk for $11 billion will enable the drugmaker to better meet the growing demand for its products, as Catalent is the primary supplier of fill-finish work for Wegovy and Ozempic.

"Novo's ability to supply the growing obesity market could be accelerated by the close of this deal, as BMO Capital Markets analyst Evan Seigerman wrote in a note on Friday. Novo has emphasized that it sees no issues with patient demand, and with every dose spoken for, capacity is the key bottleneck in the growth of its GLP-1 franchises."

The European Commission, the executive body of the European Union, stated that the transaction would not pose a significant competitive threat. The commission added that drug manufacturers will still have access to multiple alternative manufacturers of prefilled syringes and orally disintegrating tablets.

"The Commission stated that the transaction would not result in customers being without alternative sources of supply, as there is ample spare capacity in the market."

Competing drugmakers have pushed back on the deal.

This year, the first person to suggest that Eli Lilly's reliance on a Catalent site for some production could pose issues was due to the company being a key rival of Novo Nordisk in the weight loss drug space. In August, Eli Lilly CEO David Ricks told analysts that the oddity of the company's main competitor being also its contract manufacturer was a concern, and he needed to resolve the situation.

In a media call in October, Thomas Schinecker, Catalent's top executive, stated that the Catalent deal would not impact the company but could pose a problem for smaller players in the weight loss drug market. He emphasized that limiting competition in this space, which Roche is also racing to enter, is not a good idea.

In October, over 10 unions, public interest organizations, and consumer groups sent a letter to FTC Commissioner Lina Khan, requesting her to challenge the transaction and safeguard competition while ensuring that consumers have unrestricted access to treatments.

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Nobel Prize winners urge senators to oppose confirmation of Robert F. Kennedy Jr.

On Monday, over 79 Nobel laureates in the fields of chemistry, medicine, economics, and physics signed a letter urging the Senate to reject the nomination of Robert F. Kennedy Jr. for the position of Health and Human Services secretary.

Last month, President-elect Donald Trump named Kennedy as his HHS pick, despite his past promotion of misinformation and conspiracy theories about vaccines, Covid-19, and autism.

If Kennedy is confirmed by the Senate to lead HHS, he will oversee the Food and Drug Administration, Centers for Disease Control and Prevention, Medicare and Medicaid insurance programs, and National Institutes of Health.

The Nobel laureates in a letter obtained by CNBC on Monday strongly urged senators to vote against Kennedy's appointment. This was first reported by The New York Times.

The letter stated that Mr. Kennedy lacks credentials or experience in medicine, science, public health, or administration, and he is an opponent of many health-protecting and life-saving vaccines.

"Due to his history, appointing Mr. Kennedy as head of DHHS would endanger public health and weaken America's global standing in the health sciences, in both the public and commercial domains," the statement read.

The letter's signatories include 31 Nobel laureates in medicine, 18 in physics, 17 in chemistry, and 11 in economics. The letter was signed by Victor Ambros and Gary Ruvkun, who won the award for medicine this year for their discovery of microRNA, and Daron Acemoglu and Simon Johnson, who won the prize for economics this year for their work on how institutions affect nations' prosperity.

Here's the full text:

December 9th, 2024

To Members of the United States Senate:

We, the undersigned Nobel Laureates, urge you to reject the nomination of Robert F. Kennedy, Jr. as Secretary of the Department of Health and Human Services (DHHS).

The suggestion to appoint Mr. Kennedy as head of the federal agencies responsible for safeguarding the health of American citizens and conducting research that benefits humanity has been met with widespread criticism. Despite his lack of qualifications or experience in medicine, science, public health, or administration, Mr. Kennedy has been a vocal opponent of vaccines, such as those that prevent measles and polio, and has criticized the positive effects of fluoridation of drinking water. He has also promoted conspiracy theories about successful treatments for AIDS and other diseases and has been a harsh critic of respected agencies, particularly the Food and Drug Administration, the Centers for Disease Control, and the National Institutes of Health. As head of DHHS, it is crucial to support and enhance these esteemed institutions and their employees, rather than threatening them.

Placing Mr. Kennedy in charge of DHHS would pose a risk to public health and weaken America's global standing in the health sciences, in both the public and commercial sectors, given his record.

It is strongly advised that you vote against the confirmation of his appointment as Secretary of the DHHS.

77 Nobel Laureates in Medicine, Chemistry, Physics, and Economics

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