In case you work at a biotech firm within the therapeutic space of ​​diabetes or weight problems, John McDonald might wish to speak to you. McDonald is international head of enterprise improvement and M&A at Novo Nordisk, an organization that was one of many prime dealmakers in 2023, finishing 14 transactions totaling $9.5 billion in disclosed deal worth.

Novo Nordisk's dealmaking actions proceed. Earlier this yr, the corporate entered right into a multi-billion greenback acquisition deal to safe manufacturing capability to help the manufacturing of its GLP-1 metabolic dysfunction medicine. The sturdy demand for these medicines is placing stress on the corporate's manufacturing capability.

Demand for GLP-1 medicine interprets into rising revenues. Novo Nordisk's GLP-1 drug franchise alone generated gross sales of DKK 34.9 billion (roughly $5 billion) within the first quarter of this yr, a rise of greater than 30% in comparison with the identical interval in 2022. The market demand exhibits no indicators of ebbing, and Novo Nordisk is placing its money circulation to work by closing offers to increase the corporate's drug portfolio and pipeline. Throughout a hearth chat Tuesday on the annual BIO convention in San Diego, McDonald shared his ideas on Novo Nordisk's enterprise improvement technique.

Competitors is fierce – for good belongings. Such belongings fetch excessive costs with giant upfront sums, McDonald mentioned. However Novo Nordisk presents stability that many different firms can't. It’s owned by the Novo Nordisk Basis, which isn’t going to promote itself to anybody else or promote its controlling stake in Novo Nordisk, McDonald mentioned. Inside Novo Nordisk itself, the drug producer has individuals who have been working there for a very long time. At some giant pharmaceutical firms, turnover signifies that the one who appreciated your organization or belongings might not be there after three years.

Novo Nordisk's motivation for making offers is the fact that the day will come when semaglutide, the energetic pharmaceutical ingredient in its GLP-1 medicine, will lose patent safety, McDonald mentioned. The corporate should discover medicine to switch these revenues. Novo Nordisk CEO Lars Fruergaard Jørgensen desires to search out early drug candidates the place the pharmaceutical large can do one thing to make its asset stronger. Consequently, the belongings add worth to Novo Nordisk. However moderately than specializing in firms primarily based on the stage of their belongings, McDonald mentioned Novo Nordisk's strategy is to have a look at the panorama and see what matches their pursuits.

McDonald mentioned Novo Nordisk takes a layered strategy to prioritizing its enterprise improvement work. The best therapeutic tier is diabetes and weight problems. Subsequent is heart problems. Market demand for belongings in these layers is excessive and Novo Nordisk is prepared to pay extra to get these molecules, he mentioned. Beneath cardiovascular, the subsequent degree is renal belongings, comparable to drugs for metabolic dysfunction-associated steatohepatitis (MASH) and persistent kidney illness. Inside these layers of therapeutic focus, Novo Nordisk is open to many various kinds of medicines.

“We all know now we have to compete on the planet, we want various kinds of modalities, so we’re modality agnostic,” McDonald mentioned.

Areas that aren’t a precedence embody gene modifying and gene remedy, though the corporate has taken some steps. Novo Nordisk can even have a look at offers in uncommon blood ailments, comparable to sickle cell illness and hemophilia. The give attention to uncommon blood varieties has been expanded to incorporate uncommon ailments. One space that Novo Nordisk has no real interest in in any respect is oncology. However by way of areas of focus for Novo Nordisk, McDonald says he would moderately companion with an organization than purchase it. Many acquisitions result in mind drain when workers of the acquired firm depart after the deal has closed.

“In a partnership state of affairs, an organization makes cash by working with you so the expertise stays,” he defined.

Earlier than Novo Nordisk acquired Dicerna Pharma, the corporate was a companion within the R&D of medicine for metabolic problems. The connection started in 2019, when Novo Nordisk dedicated $225 million in what McDonald described as his firm's largest platform deal. Dicerna's expertise platform develops medicines towards RNA interference. In 2021, the pharmaceutical large struck a $3.3 billion deal to accumulate Dicerna, including the corporate's platform and drug pipeline.

When collaborating, some firms that wish to work with Novo Nordisk need the connection to be unique. McDonald gained't try this. A Section 1 asset has a ten% probability of success. To extend the probabilities, it makes extra sense for Novo Nordisk to work with multiple companion. If Novo Nordisk is keen on a selected space, the corporate should place a number of bets, he defined.

Novo Nordisk will work with early-stage firms if essential, McDonald mentioned. In different circumstances, the partnership could also be established at a later stage. Both approach, there's loads of innovation within the biopharmaceutical world nowadays. In Novo Nordisk's prime precedence in diabetes and weight problems, the corporate is reviewing all the pieces in these areas world wide to make sure the corporate hasn't missed something.

McDonald mentioned he’s additionally happy with the cardiovascular pipeline the corporate has constructed. The newest acquisition was the acquisition of Cardior Prescribed drugs in March. Cardior has medicine in Section 1 and Section 2 improvement for the therapy of genetic ailments that have an effect on the guts. The full worth of the deal was greater than $1 billion.

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