Novo owner commits $265 million of Wegovy windfall to respiratory diseases

[December 18, 2023]  By Jacob Gronholt-Pedersen

COPENHAGEN (Reuters) - The Novo Nordisk Foundation, which controls drug maker Novo Nordisk, said on Monday it would commit up to 1.8 billion Danish crowns ($265 million) to setting up an initiative aimed at improving vaccines for respiratory diseases.

A huge windfall from the runaway success of Novo Nordisk's weight-loss drug Wegovy has bulged coffers of the foundation, potentially making it a major philanthropist and environmental, social and governance (ESG) investor.

The initiative aims to create new or improved vaccines for some of the deadliest respiratory diseases, including tuberculosis, influenza and group A streptococcus, which collectively cause more than 2.5 million deaths per year, the foundation said.

In partnership with University of Copenhagen, it will be the first in the world to focus solely on understanding how to generate immunity in the airway, the foundation said.

The global fight against tuberculosis was badly hit by the COVID-19 pandemic. A lack of funding and focus has stymied efforts to end what has been described as the "pandemic of the poor."

Novo Nordisk has faced some criticism for the high price of its first-to-market weight-loss drug, making it less accessible for low-income people who are most affected by obesity.

A general view of Novo Nordisk Foundation headquarters in Hellerup, Denmark, October 3, 2023. REUTERS/Ali Withers/ File photo

The company also said in June that the drug will likely not be sold in developing countries for a very long time.

The Novo Nordisk Foundation Initiative for Vaccines and Immunity (NIVI) initiative follows Norway's Coalition for Epidemic Preparedness Innovations (CEPI), which helps fund vaccine research with funding from governments including the U.S., Britain and Norway, and private contributors like the Gates Foundation.

According to Berenberg analysts and Reuters calculations, the Novo Nordisk Foundation will receive about $12.5 billion in returns between last year and 2026, roughly double its income in 2018-2021, before Wegovy launched in the U.S.

($1 = 6.8032 Danish crowns)

(Reporting by Jacob Gronholt-Pedersen;Editing by Elaine Hardcastle)

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