As Novo Nordisk’s weight loss drug enters the Chinese market, its patent is expiring in two years and biosimilar competition is rising.
Late last month, China’s National Medical Products Administration approved Novo Nordisk’s blockbuster GLP-1 weight loss drug Wegovy (semaglutide), opening up another multimillion-dollar market for the Danish pharma. However, the approval comes at a time when biosimilar competition in China is ramping up.
Wegovy’s expansion to China is “incrementally positive,” Evan Seigerman, the managing director and senior research analyst at BMO Capital Markets, told BioSpace. According to an analyst report from the Bank of Montreal Capital Markets, the company could generate peak sales of $929 million as China’s obesity rates climb. That’s far less than the revenue Wegovy is generating in the U.S., where sales accounted for some 90% of the $4.5 billion or so the drug brought in last year. Seigerman said the current Chinese sales forecasts for Wegovy are a “loose assumption,” noting unknown factors such as the pricing, availability or the broader dynamics of the market.
Moreover, Wegovy may soon face some stiff biosimilar competition in China. The patent on semaglutide, Wegovy’s main ingredient, is set to expire in less than two years in the country, compared to 2032 in the U.S., according to Reuters.
Novo has started a legal effort to extend its patent, but at least 15 generic versions of semaglutide are being developed in China, with several in late-stage trials. Seigerman said these biosimilars should not threaten Novo’s larger markets in the U.S. and Europe, as he doesn’t see them being sold beyond China or the FDA approving biosimilar products made in China.
Novo’s Manufacturing Push
To support Wegovy’s launch in China, Novo has been making significant investments in its manufacturing apparatus in the country. In March, the pharma announced it was investing ¥4 billion, or over $500 million, into its facility in Tianjin, China. The project, estimated to be completed by 2027, is intended to expand the facility and help meet the demand for its products in China.
Meanwhile, Novo is investing in its U.S. manufacturing foothold, which could further defend its market share against the future loss of patent exclusivity, Seigerman said, as any biosimilar manufacturers would be far behind Novo in terms of manufacturing and unable to supply the market. Already, Novo has announced plans to invest $4.1 billion into its Clayton, North Carolina, site to build another fill-finish facility.
Seigerman noted that these manufacturing investments should eventually bring down the price of Wegovy, and Novo’s semaglutide type 2 diabetes drug Ozempic, which may shore these GLP-1s up against wider biosimilar competition.
“We assume net pricing for Ozempic and Wegovy goes down over time to the point where it’s a couple hundred dollars per patient per month,” he said. “And they can do that because [Novo is] so efficient with their manufacturing.”
