TheChek News Flow

Danish maker of Wegovy has little competition in the country and massive demand that it can take advantage of

In China, as in many other countries, slimness is an oft-promoted beauty standard. But the actual statistics in the country, with more than half the population classified as overweight, tell a different story. This is good news for Novo Nordisk’s obesity drug Wegovy. 

Wegovy, which contains the active ingredient semaglutide, has been approved in China for long-term weight management for overweight and obese people. The Danish drugmaker has little competition and massive demand it can take advantage of.

The supply of drugs containing semaglutide has been highly controlled and limited in mainland China as, until now, they were approved only for the treatment of type 2 diabetes. Even so, the market was valued at about $1.7bn last year, according to analytics group Clarivate. A severe shortage in the country has resulted in the drugs trading at well over double their prescription price on the black market.

There are just two local drugs that have already been approved for weight loss — Huadong Medicine’s liraglutide and Benamae Pharma’s beinaglutide. There is a strong pipeline of local rivals that are in their final stages of clinical trials. But they will have a difficult time commercialising the drugs in the short term due to Novo’s patent on semaglutide that runs through 2026. Shares in Huadong, down 30 per cent in the past year, reflect investors’ pessimism on the local sector despite promising developments.

That may be too harsh — at least considering their long-term prospects. Demand for weight loss drugs is set to grow at unprecedented levels. In China, the number of adults overweight is expected to triple, with the number of people classified as obese projected to increase more than sevenfold by 2030 from 2000 levels, according to Chinese public health research.

There is even bigger potential for export. India has the third-largest number of people living with obesity, behind China and the US. Novo Nordisk’s Wegovy and Ozempic, plus Eli Lilly’s rival product, are not available in India. There are no plans in the near future to supply the country due to global shortages. Ozempic is designed for type 2 diabetes but is often used off-label for weight loss purposes. More than a tenth of the Indian population is estimated to be living with diabetes. That should give Chinese weight loss drugmakers room for growth in the longer term.

In the meantime, Novo stands to gain an exceptional windfall in one of the biggest markets in the world.

Vauxhall owner could move production to other sites in Europe, as government quotas threaten returns

Vauxhall owner Stellantis has warned it could stop production in the UK unless the British government does more to stimulate demand for electric vehicles or change its current electrification policy.

In the company’s strongest threat yet against the UK’s EV quotas, Maria Grazia Davino, the carmaker’s top UK executive, warned of tough EV mandates amid slowing sales in battery-run cars. “If this market becomes hostile for us, then we will enter an evaluation of producing elsewhere,” she said. “Stellantis production in the UK could stop.”

Her comments follow that of Stellantis chief executive Carlos Tavares, who called Britain’s EV policy “terrible”, which threatened to bankrupt carmakers.

The carmaker, which owns the Vauxhall, Peugeot, Citroën and Jeep brands, said it was considering the future of the whole UK operations.

It directly employs 2,500 people in both Luton and its Ellesmere Port factory in Cheshire. In Luton, it manufactured 90,000 diesel vehicles in 2023 and produced just under 4,500 electric vans in Ellesmere Port in the 3 months to December last year. Luton will start making some larger battery vans from 2025.

Speaking at the Society of Motor Manufacturers and Traders’ annual summit in London on Tuesday, Davino said the UK’s quota regime, which requires manufacturers to meet EV sales targets and rise annually, had put the company’s UK financial return “under stress”.

Her warning is the latest among car executives pushing back on the government’s EV quotas, with EV targets of 22 per cent of overall car sales this year, rising every year until 2030 to 80 per cent.

Carmakers that miss the targets face heavy penalties, though the scheme features concessions that aim to minimise the chance of manufacturers paying fines.

EV sales are rising slower than had been expected, leading several carmakers to warn they risk missing the targets. Ford’s then European boss Martin Sander told the Financial Times last month that the carmaker would divert petrol models to other countries to avoid crippling fines amid weak EV demand.

Davino said the company needed to find the right balance within the government mandate, and that a decision on the future of its UK production would probably come in less than a year.

About 14 per cent of Stellantis’s car sales, including the Peugeot, Citroën, Fiat and Jeep brands, in the UK are electric, while almost 8 per cent of its vans are battery model.

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