Wegovy legend Novo Nordisk pursues public good and profit

Amit Kakar, Head of Novo Holdings Asia

Emphasizes impact investment... promoting human and planetary health as core principles

“Korea is an attractive market in terms of investment... is actively building relationships to explore investment opportunities.”

KRW 318 trillion.

 

This is the market capitalization of Novo Nordisk as of the closing price on the 16th.

 

The market capitalization of this single Danish pharmaceutical company is more than 15 times larger than the combined market capitalization of the top 10 pharmaceutical companies in South Korea (JW Pharmaceutical, Kwangdong Pharmaceutical, GC Biopharma, Daewoong Pharmaceutical, Dong-A Pharmaceutical, Boryung Pharmaceutical, Yuhan Corp, Ildong Pharmaceutical, Chong Kun Dang, and Hanmi Pharmaceutical), which totals approximately KRW 21 trillion.

 

Novo Nordisk rose to the top of the European stock market by capitalization thanks to its GLP-1 (glucagon-like peptide-1) class obesity treatment drug “Wegovy.” The foundation-owned governance structure has served as a key factor to Novo Nordisk's explosive growth.

 

The company operates under a model of “Foundation → Holding Company → Operating Company.” The nonprofit public interest foundation Novo Nordisk Foundation holds 100% of the shares in Novo Holdings, which in turn controls the core business entities such as Novo Nordisk and Novonesis..

 

Novo Holdings structure (Source: Novo Holdings)

Thanks to this structure, Novo Holdings can consistently implement its investment philosophy without being swayed by short-term profits or market fluctuations.

 

Novo Holdings does not prioritize financial performance above all else.

 

Instead, it aims to create sustainable value by promoting human health and planetary health as its core values.

 

Novo Holdings also has the flexibility to respond to changes in equity stakes and investment methods.

 

It can secure a majority stake to deeply engage in direct management or, conversely, hold a minority stake while focusing on long-term support and public interest objectives.

 

The timing of investment exits is not strictly predetermined.

 

In other words, Wegovy is the result of a foundation-owned governance structure and a long-term investment philosophy.

 

Novo Holdings' financial performance is also noteworthy.

 

Last year, Novo Holdings generated revenue of EUR 8 billion (approximately KRW 13 trillion), a nearly twofold increase from the previous year.

 

The portfolio return rate jumped from 9.4% in 2023 to 18% last year.

 

Novo Holdings has expanded its global investment footprint significantly recently.

 

In particular, since establishing its Asia office in Singapore in 2021, it has been rapidly expanding its presence in the region.

 

Dailpharm met with Amit Kakar, Head of Novo Holdings' Asia and Managing Partner, about the company's investment vision and future plans for Asia, including Korea.

 

Amit Kakar, Head of Novo Holdings Asia and Managing Partner

-What are the core philosophies or principles guiding Novo Holdings' global investment decisions? As a long-term investor, Novo Holdings has a dual mandate to generate attractive financial returns while making a meaningful contribution to improving human health and planetary health.

 

Our investment strategy is rooted in our deep heritage in life sciences, our global network, and our value-based responsible investment approach.

 

-In terms of investment, what industries or platform technologies is Novo Holdings currently focusing on? Novo Holdings invests across the entire life sciences value chain.

 

We focus on biotechnology, biopharmaceuticals, medical technology, healthcare information technology (IT), pharmaceutical services, diagnostics, and life science tools.

 

We are also actively expanding into the field of planetary health and investing in science-based, scalable solutions to environmental and social issues.

 

From an investment cycle perspective, we execute investments across all stages of corporate growth, ranging from early-stage investments such as seed or venture capital to growth-stage equity investments and large-scale direct investments.

 

We also operate a globally diversified capital investment portfolio to spread risk.

 

-How does Novo Holdings view investment opportunities in Asia, particularly in South Korea? Asia is a strategic growth region for Novo Holdings.

 

The region combines rapid urbanization, growing healthcare demand, and innovation potential, which align closely with our long-term investment mission.

 

To date, we have built a diverse portfolio through our teams in Singapore, Shanghai, and Mumbai.

 

South Korea is an attractive market with strong innovation capabilities, a solid R&D infrastructure, and a growing global presence in the biopharmaceutical, diagnostics, and medical device sectors.

 

Novo Holdings views South Korea as an important pillar of its Asia strategy and is actively seeking to build relationships to explore future collaboration and investment opportunities.

 

-Are there any cases of ongoing or planned collaborations between Novo Holdings and Korean companies or institutions? South Korea is a key market of interest for Novo Holdings in Asia.

 

In April last year, Novo Nordisk and the Korea Health Industry Development Institute (KHIDI) jointly hosted Novo Nordisk Partnering Day in Seoul.

 

The event was organized to increase contact with innovative Korean companies and discover opportunities for synergy.

 

We are also seeking collaboration opportunities with Korean investors who share our vision in various fields, including strategic focus areas such as medical devices, life science tools, and pharmaceutical services.

 

This is part of our efforts to collaborate with outstanding companies or institutions that share our values and long-term vision.

 

-How does Novo Holdings reflect social value and sustainability in its investment strategy in the Asia region? Sustainability is a core principle of Novo Holdings' investment strategy.

 

Through its Planetary Health Platform, Novo Holdings invests in commercially viable companies that provide practical solutions to global challenges such as food, agriculture, materials, energy, and water.

 

Asia plays a key role in this strategy due to its scale, biodiversity, and the urgency of its transition to sustainability.

 

AgNext, a company in India that Novo Holdings recently invested in, uses artificial intelligence (AI) to improve the reliability and transparency of food systems.

 

Sylvan, a company in China, develops fungus-based biotechnology for sustainable agriculture.

 

These two investment cases are representative examples of the implementation of the company’s Planetary Health portfolio strategy in the Asia region.

 

-Does Novo Holdings have a specific method for identifying and evaluating potential investment or partnership opportunities in Asia?

 

How does the company manage risk in a dynamic region such as Asia? Novo Holdings' approach is based on local expertise and in-depth industry knowledge.

 

We have teams across Asia and design our strategies specific to each country, taking into account its dynamics, market maturity, and regulatory environment.

 

Risk management is embedded in Novo Holdings' investment process.

 

We combine thorough due diligence with active ownership.

 

We often participate in boards to align long-term goals and manage the governance of our portfolio companies.

 

-Among various forms of collaboration, such as strategic minority investments, joint ventures, and mergers and acquisitions (M&A), does Novo Holdings have a preferred approach? Novo Holdings invests at all stages of corporate growth by utilizing both strategic minority stake investments and full acquisitions.

 

However, in Asia, we tend to prefer strategic minority stake investments.

 

We primarily utilize a partnership approach with founders and management to support growth and innovation.

 

Of course, if the strategic direction and interests align well, the possibility of joint management or securing a majority stake is also open.

 

Novo Holdings can collaborate with various stakeholders, including private equity funds, sovereign wealth funds, and family offices, thanks to its flexible investment structure.

 

It can also adjust its investment approach to suit each investment opportunity.

 

This approach enables the company to fulfill its role as a long-term, proactive, and responsible investor.