Wegovy: Disrupting Obesity Care and Supply Chains

Novo Nordisk has a problem. Yesterday its stock lost 16 billion dollars from its value. This is because the company is hitting some bumps in its journey through the uncharted territory of obesity care. For more than a decade now, Novo has been investing in a genuine effort to meet a need for better obesity care. It’s something that really hasn’t been done before. Not with any strategic foresight. So now, the company is facing success coming faster than they can manage in an orderly way. Wegovy – semaglutide for obesity – is taking off so fast that it is not only disrupting obesity care, it’s disrupting supply chains.

In fact, the disruption is so great that Novo announced yesterday that “few new patients” will be able to get Wegovy anytime soon. The company is focused on getting the drug to the unexpectedly large number of patients who are already using it.

This is not just an acute pinch in supply. Novo says it will not be able to fully satisfy demand until the latter part next year. The news prompted an eight percent drop in the value of Novo Nordisk stock yesterday.

A Major Expansion in Use of Anti-Obesity Medicines

This problem has been brewing for a while. Wegovy launched in June. By October, demand was already outstripping the demand for Saxenda, which had been on the market for six years with great success. We are witnessing a major expansion in the use of anti-obesity medicines. More than 70 percent of prescriptions for Wegovy are for people who have never received any medicine for obesity.

Remember: all of this happened in just three months. So this is just a small taste of what lies ahead.

Investing $2.58 Billion, Building Three New Facilities

Several new options are on the way to compete with Wegovy and perhaps offer incremental improvements, as well as other benefits from competition. The longer term future for obesity care indeed looks bright. Success becomes a beacon for more to follow.

So when people said Wegovy would be a game changer, they were right.

But for now, just making enough of this stuff is quite a challenge for Novo Nordisk. The company is investing 2.58 billion dollars to build three new facilities for manufacturing semaglutide. This will indeed take time. But then, building a sustainable market for obesity care also took time and much work still lies ahead.

Click here and here for more on Wegovy supply challenges. For more on the future for anti-obesity medicines, click here.

The City Rises, painting by Umberto Boccioni / WikiArt

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December 18, 2021