Novo Nordisk owner sees IPO window opening within 18 months

By Maggie Fick

COPENHAGEN (Reuters) -The CEO of Novo Holdings, the controlling shareholder of Danish drugmaker Novo Nordisk, said on Tuesday he sees the window for initial public offerings (IPOs) opening within 18 months and is encouraging portfolio companies to get ready.

Novo Holdings’ CEO Kasim Kutay was speaking to a group of journalists in Copenhagen, where the investment company and Wegovy-maker Novo Nordisk are both headquartered.

Novo Holdings holds 28.1% of economic (or A) shares and 76.9% of voting (or B) shares in Novo Nordisk, now Europe’s most valuable listed company, worth about 385 billion euros.

The success of its weight-loss and diabetes drugs, Wegovy and Ozempic has helped the drugmaker to record profits and its share price has roughly tripled over four years.

Novo Holdings invests and manages the wealth and assets of the Novo Nordisk Foundation, which can expect a big windfall.

According to Berenberg analysts and Reuters calculations, the Foundation will receive about $12.5 billion in returns between last year and 2026. That is roughly double what it received over the years 2018-2021 before Wegovy launched in the United States.

The Foundation has pledged to disburse those returns through charitable grants and through investments made by Novo Holdings, which is its wholly owned investment and holding company.

The Copenhagen-based Foundation has never been in the spotlight, and only had three employees in 2009. But the amount of money newly at its disposal has rapidly become so large that it has the potential to become a major philanthropic player and environmental, social, and governance (ESG) investor.

Kutay said Novo Holdings has 161 portfolio companies, which do not reflect its full investment activities, given the investments are through external portfolio managers and funds into other companies.

A roughly 50-50 split between life sciences and capital investments makes sense for Novo Holdings because the life sciences sector is embedded in the broader Foundation structure, he said, adding: “We are differentiated because we know it well and can make a difference.

Kutay said the healthcare sector more broadly has “incredible tailwinds”, and will continue to grow due to ageing populations, chronic diseases including obesity, and large investments in healthcare by governments in emerging markets.

Kutay said Novo Holdings had 160 employees as of June but is looking to expand to 180 next year. It has six offices globally, including one that opened in Shanghai earlier this year to focus on investments in China.

It also opened an office in Singapore several years ago, and has U.S. offices in Boston and San Francisco.

Total returns of Novo Holdings were down 6% in 2022, outperforming its benchmark and many peers, Kutay said, despite the negative underlying market trends.

(Reporting by Maggie Fick, Editing by Louise Heavens and Catherine Evans)