Novo Nordisk Expands R&D Presence in China with New Manufacturing Plant

| About: Novo Nordisk (NVO)

Novo Nordisk (NYSE:NVO) will invest almost $400 million to build a very large insulin manufacturing facility in Tianjin. The new facility will function as the company’s primary production site in China and serve the entire Asia Pacific region. The new 22,500 sq. meter plant, which will employ almost 500 people, is expected to become operational in 2012. The facility will be built on a site adjacent to Novo Nordisk’s existing manufacturing plant in Tianjin.

The company expects to produce its diabetes products, NovoMix 30 and NovoRapid, at the Tianjin site. Novo Nordisk also plans to formulate and fill Levemir, its once-daily insulin analogue, at the new Tianjin facility.

"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 chief executive officer of Novo Nordisk in a statement. Plans for the new facility were unveiled at a ground-breaking ceremony in Tianjin.

Novo Nordisk built its first manufacturing facility in Tianjin in 1996. It has been expanded twice, in 2002 and 2005. In 2002, Novo Nordisk was the first multinational big pharma to build a biotech-focused R&D center in China. The R&D center, which was sited in Beijing, employed 30 at the outset but has since been expanded to 60 employees.

According to Novo Nordisk, the incidence of diabetes in China is high and growing. Some 40 million people Chinese are thought to suffer from the disease, the second-highest number in any single country after India. Another 64 million Chinese have impaired glucose tolerance, a condition also known as prediabetes.

In 2004, Novo Nordisk claimed to control 70% of the diabetes market in China. It has over 1,700 employees in China. Its existing manufacturing facility produces diabetes products for China and for export, as the company has internationalized its manufacturing base.

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