[1/4]Kasim Kutay, CEO of Novo Holdings A/S, speaks at the Novo Nordic Foundation in Hellerup, Denmark on October 3, 2023. REUTERS/Ali Withers acquires license rights
COPENHAGEN, Oct 3 (Reuters) – Novo Holdings’ CEO said on Tuesday the majority shareholder of Danish drugmaker Novo Nordisk (NOVOb.CO) is poised for a huge profit from the runaway success of weight-loss drug Wegovy.
Novo Holdings invests and manages the assets and assets of the Novo Nordisk Foundation, whose newly filled coffers could make it a major philanthropic player and investor in the environmental, social and governance (ESG) sectors.
Kasim Kutay, CEO of Novo Holdings, referred to estimates that Wegovy and other drugs will generate returns of more than $12 billion in the coming years: “If these projections are correct, that will make us a hell of a lot of money over the next decade and hopefully even more.
He spoke to a group of journalists in Copenhagen, where the investment company and Novo Nordisk are headquartered. Last month, the drugmaker overtook LVMH (LVMH.PA) to become Europe’s most valuable listed company, valued at around 385 billion euros ($403 billion) – more than Denmark’s GDP.
Novo Holdings holds 28.1% of the economic (or A) shares and 76.9% of the voting (or B) shares in Novo Nordisk, whose share price has almost tripled since Wegovy launched in June 2021, along with a another drug for weight loss and diabetes. Ozempic achieves record profits.
According to Berenberg analysts and Reuters calculations, the Novo Nordisk Foundation will generate around $12.5 billion in revenue between last year and 2026 – about double its revenue in 2018-2021, before Wegovy was launched in the US .
The Foundation uses its proceeds to fund investments by its wholly owned investment and holding company, Novo Holdings, and to make charitable grants.
After years out of the spotlight — according to its website, it had just three employees in 2009, compared to 180 now — the amount of money the foundation now has could make it hugely influential.
Kutay said he believes Novo Holdings’ systems and policies are robust and that he is “cautiously optimistic” that the company can handle the huge growth in its assets.
“It changes my life a lot. I have to invest this money. It brings a lot of responsibility,” said Kutay, who has led the company since 2016. He previously worked for the investment bank Moelis & Co and the US bank Morgan Stanley.
Novo Holdings will hire more people, potentially open more offices and expand its geographic footprint, he said.
Earlier Tuesday, he said Novo Holdings had 160 employees in June but wanted to grow to 180 next year. The company has six offices worldwide, including one that opened in Shanghai earlier this year to focus on investing in China.
Additionally, the company opened an office in Singapore a few years ago and has US offices in Boston and San Francisco.
Novo Holdings’ total returns fell 6% in 2022, outperforming its benchmark and many peers, Kutay said, despite negative underlying market trends.
($1 = 0.9542 euros)
Reporting by Maggie Fick, writing by Josephine Mason; Edited by Louise Heavens and Catherine Evans
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