Novo Nordisk A/S (NYSE:NVO) is embarking on a significant bond sale, amounting to €4.65 billion ($5 billion), to bolster the production of its renowned pharmaceuticals, in response to robust investor demand for its first debt issuance in over two years.
The Danish pharmaceutical giant aims to utilize the proceeds to support its ambitious plans, including the expansion of manufacturing capacity for its blockbuster drugs, spurred by the overwhelming popularity of its diabetes treatment Ozempic and obesity medication Wegovy. The funds will also facilitate Novo’s $11 billion acquisition of production facilities from Catalent Inc., according to a spokesperson from the company.
In a four-part debt offering conducted through its finance subsidiary in the Netherlands, Novo Nordisk marketed euro-denominated bonds with varying maturities ranging from two years to 10 years. The offering garnered significant investor interest, surpassing €10.2 billion in bids, and drove spreads approximately 30 basis points below the initial price targets.
The surge in demand for Ozempic and Wegovy, celebrated for their efficacy in weight loss treatment, prompted Novo to revise its 2024 sales forecast, projecting a potential surge of up to 27%. To meet escalating demand and bolster its manufacturing capabilities, the company is making substantial investments, including the acquisition of three sites previously owned by Catalent, with the deal slated to conclude later this year.
The bond sale is orchestrated by global coordinators BNP Paribas SA, Deutsche Bank AG, HSBC Holdings Plc, and ING Groep NV, with active bookrunners Bank of America Corp, Danske Bank A/S, Morgan Stanley, Nordea Bank Abp, and Skandinaviska Enskilda Banken AB participating in the trade.
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