FDA: Quality issues at the factory producing active ingredients for Novo Nordisk's weight loss drug

Novo Nordisk's factory has been accused of having drug quality issues, with only two places in the world producing the active ingredient in the popular weight-loss drugs Ozempic and Wegovy - semaglutide, and this factory is one of them.

On Tuesday, October 29th, Eastern Time, according to Bloomberg, based on a March inspection report by the U.S. Food and Drug Administration (FDA), the FDA investigated Novo Nordisk's factory in Kalundborg, Denmark, and found that the factory did not provide sufficient evidence in terms of quality control to demonstrate that its water used for drug production meets clean and safe standards, especially in controlling certain microorganisms, which could affect the quality and safety of the drugs.

After the news was released, during Tuesday's midday trading session, Novo Nordisk ADR fell nearly 1.1%, hovering near a nine-month low.

Novo Nordisk produces drugs for treating obesity and diabetes. They did not expect these drugs to be so popular at first, so they are now busy increasing drug supply. At the same time, they also have to deal with an issue with an outsourced manufacturer. Additionally, earlier this year, there was a fire at the Kalundborg factory. This factory is crucial for them as it is key to meeting market demand.

To increase production capacity, Novo Nordisk has launched an expansion project at the Kalundborg factory, which will last for 8 years and cost over $8 billion, with plans to complete it in 2029.

Furthermore, Novo Nordisk also has a factory in North Carolina, USA, that produces semaglutide. In September last year, this factory was also accused by the FDA of not properly investigating bacterial contamination issues