Novo Holdings is fattening up as patients slim down. Boosted by the Wegovy windfall, the fund manager’s CEO Kasim Kutay expects to do “a fair amount” more deals in 2024 and to open a second office in Asia.
Speaking to Bloomberg TV in Davos, Kutay outlined how the success of Novo Nordisk, one of two Novo Holdings operating companies, will affect his activities in 2024 and beyond. The operating companies are providing “significant dividends” that Novo Holdings will use to execute a strategy that calls for half of its money to go into life sciences.
A buyout team will use some of the money. The unit, called the principal investment team, does “a fair amount of buyout activity in the life sciences and healthcare sector,” Kutay said, and there will be more to come as the GLP-1 money flows into Novo Holdings.
“We did a couple of them last year. We anticipate doing a fair amount more in 2024, and indeed going forward because the cash flows that are coming our way are going to be obviously quite significant, if you look at the forecasts in terms of how the GLP-1 class is going to be doing in the coming years,” Kutay said.
The CEO went on to discuss areas of focus, explaining that “we try to avoid the areas that Novo Nordisk focuses on.” That model means the company is “not investing in diabetes and obesity as such,” although its venture capital group has put money into biotechs such as Antag Therapeutics, Embark Biotech and NorthSea Therapeutics that are active in areas targeted by Novo Nordisk.
Kutay sees “a lot of activity” in the biotech venture space, although the reasons for the hubbub over the past 12 months is more positive for the investors providing the money than the drug developers seeking it out.
“We actually had a very active year, because we found valuations very attractive. The biotech sector took a bit of a hammering starting in about late ‘21, so we found ‘23 an interesting, very interesting, time to take advantage of that,” Kutay told Bloomberg TV.