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How anti-obesity drugs built the world’s largest charitable foundation

A century ago the makers of a revolutionary new drug called insulin promised not to make “nasty profits”. Their commitment created what is now the largest charitable foundation in the world, fuelled by the latest major development in medical science: anti-obesity drugs.

The Novo Nordisk Foundation is the controlling shareholder of Danish drugmaker Novo Nordisk, currently Europe’s most valuable company thanks to soaring sales of weight loss and diabetes drugs Wegovy and Ozempic. The foundation holds 77 per cent of Novo’s voting rights and 28.1 per cent of its shares.

Chief executive Mads Krogsgaard Thomsen told the Financial Times in an interview at the foundation’s headquarters in Copenhagen that the soaring popularity of the drugs, known as GLP-1s after the hormone they mimic, took him by surprise. “It is a little bit of a dream come true.”

Before he came to run the foundation, which is little known outside Nordic countries, Krogsgaard Thomsen was chief scientific officer of Novo Nordisk. As such, he helped lead the development of the drugs that have transformed the company’s fortunes.

Thanks largely to Wegovy and Ozempic, the foundation’s assets under management have risen 300 per cent in the past 10 years and, according Krogsgaard Thomsen, it is now looking to expand overseas.

“It is very satisfying to have created or been responsible for creating all these medicines. And now, realising that some of the profits that they generate, we can return back to society, in the form of philanthropy, in the form of research, grants, education and even sometimes investments.” 

In the early 1920s, Danish Nobel laureate August Krogh was on a speaking tour in the US when he heard about the discovery of insulin. His wife Marie, a doctor, had diabetes and urged him to travel to Canada to seek permission from scientists to produce the medicine in Scandinavia. 

According to Krogsgaard Thomsen, the scientists said yes — with one condition: that the company Krogh formed with scientist Hans Christian Hagedorn and pharmacist August Kongsted, initially called Nordisk Insulinlaboratorium, would not make “nasty profits”. Instead, they said the proceeds from the sale of insulin should be invested in research.

Mads Krogsgaard Thomsen sits at a desk with his hands clasped together
Mads Krogsgaard Thomsen: ‘It is very satisfying to have created or been responsible for creating all these medicines’ © Lars Just/FT

This was achieved by creating a foundation to own the company a year after it was set up. Foundation ownership is common in Denmark: brewer Carlsberg and shipping company Maersk are also partly owned by foundations.

In Novo Nordisk’s case, thanks to the success of GLP-1s, its owner is now bigger than the Bill & Melinda Gates Foundation or the Wellcome Trust, the two other powerhouses of medical research funding and philanthropy.

In the past 10 years in particular, the money Novo Nordisk pays to it in dividends and through share buybacks has soared, rising about 180 per cent over the period to DKr14.2bn ($2.1bn) last year. As of the end of last year, the foundation had DKr805bn or $116bn of assets.

Column chart of DKr bn showing Money the foundation has received from Novo Nordisk

It pays out less than its two better known peers because its assets are less liquid and its aim is to exist forever, said Krogsgaard Thomsen. But with distributions of about 4 per cent of its assets each year, it is still one of the top three philanthropic organisations by granting capacity.

One of its aims is to try to tackle the root causes of obesity and diabetes. It also funds research on stem cell science and climate change and gives to humanitarian causes, such as providing shelters and essential medicines to Ukraine.

In all, Krogsgaard Thomsen feels it is time for the foundation to build up its international profile. “I don’t think five years ago, you would have known who the foundation was, so we are changing quite a bit,” he said. 

Novo Nordisk has become the largest company in Europe by market capitalisation because of soaring demand for its weight loss and diabetes drugs. So far, shortages mean Wegovy is available in only a handful of markets — and at a considerable cost. The US price is more than $1,300 a month. 

But the foundation wants to use these new riches to invest in earlier stage research on obesity and other cardiometabolic diseases — which include diabetes, strokes and heart attacks — and ultimately in cheaper treatments.

Column chart of Total investment assets (DKr bn) showing The foundation's assets have risen sharply in recent years

Krogsgaard Thomsen said cardiometabolic disease was “grossly underfunded”, compared with philanthropic efforts to fight infectious diseases, particularly in poorer countries. More people die of cardiovascular disease than infectious diseases, he added and, as Covid-19 showed, the former can increase the risks from the latter. 

The foundation is funding a Center for Basic Metabolic Research, a collaboration with the genomics-focused Broad Institute in Boston, and has set up a Centre for Childhood Health that aims to promote healthy weight for children. 

In parts of India and east Africa, it is teaching healthcare professionals to improve the prevention and treatment of noncommunicable diseases like diabetes. It recently opened its first office in Delhi.

As it starts to fund projects outside the Nordics, it will be important for the foundation to find experienced local partners, said Katherina Rosqueta, founding executive director of the Center for High Impact Philanthropy at the University of Pennsylvania.

“If you’re going to another country, even to another neighbourhood, it is hubris to think you can parachute [in] and help without having partners already there to help navigate specific conditions,” she said. 

Rosqueta said it was positive that the foundation wanted to use its expertise for anti-obesity initiatives in developing countries but added that a “cynical observer” might also see a link with opening up new markets. The foundation stressed it was a separate entity from the company Novo Nordisk, which has had some back office operations in India for many years.

Another difference is that the foundation can share its findings with health systems more widely because, unlike a company, it has no need to protect proprietary data. While the company does give away generic insulin in developing markets, the foundation can focus on running programmes using cheap generic drugs — those that are available now, such as statins to lower cholesterol, and later GLP-1s, when they go off patent.  

Martin Ridderstråle, senior vice-president of medical science at the foundation, said that moving away from cardiometabolic disease management towards a cure is a “must win” for the next five to 10 years. 

“If you have cancer, the next word that you want to hear is cure, right? You don’t expect me to tell you that I’m going to help manage your cancer. But if I tell you have diabetes, I will tell you: I will help you not cure it but manage the disease. That is strange. There is a need for a paradigm shift.”

Many of the foundation’s aims have long time horizons. Last year, it launched reNEW, the Novo Nordisk Foundation Center for Stem Cell Medicine, supporting research in Denmark, Australia and the Netherlands. Krogsgaard Thomsen is excited about the potential of stem cells. These are produced in the bone marrow and scientists have learnt how to change them into other types of cells.

He said that in the space of two to three weeks, “we can create any human cell type, fully differentiated, fully competent in the lab . . . We can actually regenerate the tissues that are lost — beta cells for diabetes, dopaminergic neurons for Parkinson’s disease, beating heart cells for heart failure.” 

Now, the challenge is to produce these cells at scale and at a high enough purity that they could be used for treatments.

In total, the foundation has invested more than DKr3bn ($400mn) on stem cell research, including a new manufacturing facility. “When I was head of R&D I felt constantly that I had to make sure that I invested every single Danish krone to the maximum value of future patients and shareholders. Here we can do the same, but we can also make some riskier bets,” he said.