Novo Nordisk’s semaglutide facility in North Carolina faces FDA scrutiny over quality issues

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Novo Nordisk’s shares faced a decline following reports that the FDA had raised concerns about manufacturing issues at the company’s Clayton, North Carolina production plant, which produces key ingredients for drugs like semaglutide, utilized in Novo’s popular medications Wegovy and Ozempic. The FDA conducted an inspection of the Clayton facility in July 2023 and subsequently issued a Form 483 report outlining two key quality control deficiencies.

One issue highlighted by the FDA was Novo’s failure to adequately investigate batch discrepancies, particularly related to unexplained instances of “objectionable organisms” detected during in-process testing of intermediate semaglutide. The other concern pertained to microbial controls, with the FDA noting that microbial limits had not been established for in-process active pharmaceutical ingredient (API) material, in which microbes were discovered during the recovery phase.

While Novo Nordisk did not disclose specific details of its interactions with the FDA, the company confirmed that its Clayton site remains operational and continues to produce for the market. Novo had previously taken some manufacturing of Wegovy into its own hands due to production issues at its primary contract manufacturer, Catalent.

The impact of the FDA citations on the supply of Ozempic and Wegovy, which are already facing shortages, remains uncertain. Novo Nordisk had made substantial investments in its manufacturing capacity, including a $2.58 billion global investment in December and the acquisition of adjacent land in March for $6.8 million. However, the company clarified that there were no immediate plans for development on the purchased land.

Novo Nordisk’s Clayton facility has a long history, beginning operations in 1993 and expanding over the years. In 2021, the company inaugurated a $2 billion plant adjacent to the original facility, becoming its first location outside Denmark for active pharmaceutical ingredient production.

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