November 10, 2008
Danish drugmaker Novo Nordisk has unveiled an ambitious plan to build an insulin plant in China, tapping into a major new market for diabetes treatments.
Novo Nordisk will invest a whopping $400m in the insulin production plant, based in Tianjin, China. It will serve as the company’s primary production base in the Asia Pacific region and will supply both local and export markets.
China’s relentless industrialisation is changing the health profile of the nation, with the result that it is fast-becoming a global hot spot for diabetes.
The number of cases of type 2 diabetes in China, for example, is among the highest in the world with 62.5 million cases in 2007, higher than the US, Europe and Japan combined with 48.5 million cases.
Growth in diabetes medicines such as insulin will be fuelled by increased access to health insurance, greater patient spending power and more aggressive treatment practice, including the widespread adoption of guidelines published by the American Diabetes Association, the World Health Organization and the Chinese Society of Diabetes, according to market research firm Decision Resources.
That in turn will lead to increased usage of newer treatments for diabetes, such as insulin analogues. Novo Nordisk is active in this sector with Levemir (insulin detemir), a long-acting analogue which will be formulated and filled at the new plant, along with other insulin products such as NovoMix 30 and NovoRapid.
The Tianjin investment is one of the largest investments in Novo Nordisk’s history, and the largest single investment outside Denmark, said the firm in a statement.
“The new plant in Tianjin will become the world’s most modern insulin formulation and filling plant and is yet another example of the increasingly important role China is playing in Novo Nordisk’s global operations,” said Lars Rebien Sørensen, president and CEO of the drugmaker.
The 22,500 sq. m. plant will take around two years to build, said Novo Nordisk, and after validation should become operational in 2012. It is on a site adjacent to the Danish company’s existing facility in Tianjin, which opened in 1996. The firm also operates an R&D centre in China which opened in 2002 and provides molecular biology, protein chemistry and cell biology services.
On the acquisition trail
Meanwhile, Novo Nordisk is reaching deep into its pockets to ride through the current economic storm, and has set up a war chest of $1-$2bn to be spent over the next year or so on mergers and acquisitions.
The fall in equity value of biotech companies may provide some opportunities for acquisitions as well as in-licensing deals, said Sørensen in a conference call to discuss the firm’s third-quarter results.
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