China Approves Novo Nordisk's GLP-1 Obesity Drug Wegovy

Novo Nordisk has successfully marketed its diabetes drug Ozempic in China, and now aims to replicate that success with its obesity drug, Wegovy. China's National Medical Products Administration (NMPA) has approved Wegovy, a GLP-1 treatment, for marketing. This decision is significant as it opens a new market for Novo Nordisk's obesity treatment.

Novo Nordisk introduced Ozempic (semaglutide) to the Chinese market three years ago, where it has achieved blockbuster sales. Building on this success, the Danish pharmaceutical company is now ready to launch Wegovy in China. On Tuesday, the NMPA granted marketing approval for Wegovy to treat individuals with a body mass index (BMI) of 30 or higher, or between 27 and 30 for those with at least one weight-related risk factor. In China, Wegovy will be marketed under the name NovoCare. Notably, the drug contains the same compound, semaglutide, as Ozempic.

Following the approval, Novo Nordisk's share price rose by 3%, reflecting investor confidence in the drug's market potential. The approval is timely, as obesity is an escalating issue in China. Data from 2022 indicates that over half of the adult population in China is either overweight or obese, and the country leads the world in the number of individuals with type 2 diabetes and obesity. The NMPA highlighted Wegovy's ability to facilitate an average weight loss of 17%, along with other health benefits, as key factors in its approval.

Chen Wei of the Peking Union Medical College Hospital pointed out the lack of effective clinical treatments for obesity in China, emphasizing the unmet medical need. He stated that new weight loss medications like Wegovy offer patients a much-needed safe, effective, and convenient treatment option. This sentiment underscores the importance of NMPA's approval, given the limited number of approved obesity treatments in China over the past two decades.

However, Novo Nordisk faces challenges in maximizing Wegovy's sales in China. The patent for semaglutide in China is set to expire in two years, or potentially sooner depending on an upcoming court decision. This looming expiration opens the door for other drugmakers in China, with at least 15 GLP-1 biosimilar candidates currently in development. According to a recent report by Reuters, these biosimilars could flood the market once Novo Nordisk's patent expires.

In contrast, Novo Nordisk holds exclusive rights to semaglutide in Europe and the United States until 2031 and 2032, respectively. This gives the company more time to capitalize on its product in these regions compared to China.

The approval of Wegovy follows Novo Nordisk's announcement of a substantial investment in China. Three months ago, the company revealed plans to invest 4 billion yuan ($556 million) in upgrading its manufacturing site in Tianjin, with completion expected by 2027. This investment is part of Novo Nordisk's long-term strategy to strengthen its presence in China.

In 2022, Novo Nordisk more than doubled its China sales of Ozempic, reaching 4.82 billion kroner ($693 million). However, the company now faces competition from Eli Lilly, whose dual-action GLP-1/GIP diabetes drug Mounjaro (tirzepatide) was approved by the NMPA last month. In China, Mounjaro will be marketed as MuFengDa, introducing new competition in the diabetes treatment market.

In summary, Novo Nordisk's approval to market Wegovy in China marks a significant milestone as it seeks to extend its success from Ozempic to the obesity treatment market. However, the company must navigate patent challenges and increasing competition to maximize its market potential.