If you happen to’re operating at a biotech corporate within the healing spaces of diabetes or weight problems, John McDonald may need to communicate with you. McDonald is world head of commercial building and M&A at Novo Nordisk, an organization that was once some of the best dealmakers in 2023, placing 14 transactions totaling $9.5 billion in disclosed deal price.
Novo Nordisk’s dealmaking job is constant. Previous this 12 months, the corporate struck a multi-billion acquisition settlement to protected production capability to give a boost to the manufacturing of its GLP-1 medicine for metabolic issues. Robust call for for the ones medicine is straining the corporate’s production capability.
The call for for GLP-1 medicine interprets into hovering income. Novo Nordisk’s GLP-1 drug franchise on my own accounted for 34.9 billion Danish krone (about $5 billion) in gross sales within the first quarter of this 12 months, a greater than 30% build up in comparison to the similar length in 2022. The marketplace call for presentations no signal of ebbing, and Novo Nordisk is placing its money haul to paintings, placing offers to make bigger the corporate’s drug portfolio and pipeline. In a fireplace chat Tuesday all the way through the yearly BIO convention in San Diego, McDonald shared his ideas about Novo Nordisk’s trade building technique.
Festival is fierce — for excellent property. Such property fetch prime costs with massive in advance sums, McDonald mentioned. However Novo Nordisk gives steadiness that many different firms can’t. It’s owned by means of the Novo Nordisk Basis, which isn’t going to promote itself to somebody else and is likewise now not going to promote its controlling stake in Novo Nordisk, McDonald mentioned. Inside Novo Nordisk itself, the drugmaker has individuals who had been there a very long time. At some large pharma firms, turnover signifies that the one who preferred your corporate or property is probably not there after 3 years.
Novo Nordisk’s motivation for dealmaking is the truth that the day will come when semaglutide, the lively pharmaceutical factor in its GLP-1 medicine, will lose patent coverage, McDonald mentioned. The corporate wishes to search out medicine to interchange that income. Novo Nordisk CEO Lars Fruergaard Jørgensen desires to search out early drug applicants the place the pharmaceutical large can do one thing to make the asset more potent. As a result, the property upload price to Novo Nordisk. However relatively than specializing in firms by means of the level in their property, McDonald mentioned Novo Nordisk’s means is take a look at the panorama and spot what’s a fit to its pursuits.
McDonald mentioned Novo Nordisk takes a tiered strategy to prioritizing its trade building paintings. The highest healing tier is diabetes and weight problems. Subsequent is heart problems. The marketplace urge for food for property in those tiers is prime, and Novo Nordisk is prepared to pay extra to get the ones molecules, he mentioned. Beneath cardiovascular, the following tier is kidney property, equivalent to medicine for metabolic dysfunction-associated steatohepatitis (MASH) and persistent kidney illness. Inside those tiers of healing center of attention, Novo Nordisk is open to many various kinds of medicine.
“We all know to compete on the planet, we’d like various kinds of modalities, so we’re modality agnostic,” McDonald mentioned.
Spaces that don’t seem to be on a prioritization tier come with gene enhancing and gene remedy, despite the fact that the corporate has made some strikes. Novo Nordisk will even take a look at offers in uncommon blood issues, equivalent to sickle cellular illness and hemophilias. The uncommon blood center of attention has expanded to uncommon illness. One space that Novo Nordisk has little interest in in any respect is oncology. However within the spaces of center of attention for Novo Nordisk, McDonald mentioned he prefers partnering with an organization as opposed to obtaining it. Many acquisitions result in mind drain as staff of the got corporate depart after the deal closes.
“In a partnering state of affairs, an organization makes cash by means of operating with you, so the skill will keep,” he defined.
Prior to Novo Nordisk got Dicerna Pharma, that corporate was once a spouse within the R&D of substances for metabolic issues. The connection started in 2019, with Novo Nordisk committing $225 million in what McDonald characterised as his corporate’s biggest platform deal. Dicerna’s era platform develops RNA interference medicine. In 2021, the pharma large struck a $3.3 billion deal to procure Dicerna, including the corporate’s platform and its drug pipeline.
In partnering, some firms that need to paintings with Novo Nordisk need the connection to be unique. McDonald received’t do this. A Section 1 asset has a ten% likelihood of good fortune. To fortify the percentages, it makes extra sense for Novo Nordisk to paintings with a couple of spouse. If Novo Nordisk is enthusiastic about a specific space, the corporate wishes to put more than one bets, he defined.
Novo Nordisk will spouse with early-stage firms, if suitable, McDonald mentioned. In different instances, the partnership might occur at a later level. Regardless, there’s a lot innovation within the biopharmaceutical international nowadays. In Novo Nordisk’s best precedence tier of diabetes and weight problems, the corporate is going thru the entirety in the ones spaces right through the sector to ensure the corporate has now not ignored anything else.
McDonald mentioned he’s additionally happy with the cardiovascular pipeline the corporate has constructed. The newest acquisition was once the March buyout of Cardior Prescribed drugs. Cardior has medicine in Section 1 and Section 2 building for treating genetic illnesses affecting the center. The deal’s overall price crowned $1 billion.
Photograph: Liselotte Sabroe/Scanpix Denmark/AFP, by the use of Getty Photographs