Is Novozymes Owned By Novo Nordisk?

Novozymes and Novo Nordisk are two of the largest biopharmaceutical companies in Denmark. They share a common history and ownership structure that has led many to believe that Novozymes is owned by Novo Nordisk. However, while the two companies have close ties, their ownership and operations are actually separate.

Understanding the relationship between Novozymes and Novo Nordisk is important for gaining insight into the corporate governance and strategic direction of these industry leaders. Although not directly owned by Novo Nordisk, Novozymes’ large minority shareholder still exerts significant influence. Examining their historical ties and current associations can shed light on future opportunities for collaboration in biotechnology.

Novozymes Background

Novozymes was founded in 2000 after being spun off from the pharmaceutical and enzymes company Novo Nordisk. The company is headquartered in Bagsvaerd, Denmark and has major production facilities in Denmark, China, India and the United States (Novozymes).

Novozymes is a world leader in producing industrial enzymes and microorganisms. Their core business areas include agriculture, animal health and nutrition, bioenergy, biopharma, food and beverages, household care, leather, textile and wastewater solutions. The company produces over 500 different enzymes and microorganisms through fermentation of natural microbes (About Novozymes).

Novo Nordisk Background

Novo Nordisk was founded in Denmark in 1923 as Nordisk Insulinlaboratorium by August Krogh and his wife Marie Krogh (Novo Nordisk Heritage). It was a company focused on insulin production and initially operated out of a converted stable in Copenhagen. In 1989, Nordisk Insulinlaboratorium merged with rival Danish company Novo Terapeutisk Laboratorium to form the company now known as Novo Nordisk.

Today, Novo Nordisk is headquartered in Bagsværd, Denmark just outside Copenhagen. The company specializes in diabetes care medications and devices as well as treatments for obesity, hemorrhagic disorders, and growth disorders (Novo Nordisk Wikipedia). Novo Nordisk is a global healthcare company and a world leader in diabetes care with a presence in over 80 countries.

History Between the Companies

Novozymes and Novo Nordisk have a long intertwined history dating back to the 1920s in Denmark. In 1989, Novo Industri A/S and Nordisk Gentofte A/S merged to form Novo Nordisk A/S, bringing together two companies that had collaborated closely over the years. Novozymes notes on their website that this merger formed a “biotech powerhouse” and marked the continued expansion of insulin production.

In 2000, Novo Nordisk divested its enzyme business into a separate company called Novozymes. Novozymes became an independent company in 2001, with the Novo Nordisk Foundation as the majority shareholder for both Novo Nordisk and Novozymes. This split allowed Novozymes to focus specifically on industrial enzymes and biotechnology while Novo Nordisk specialized in diabetes care.

According to Wikipedia, Novozymes’ class A share capital continues to be held by Novo Holdings A/S, a subsidiary of the Novo Nordisk Foundation. This means the foundation owns the controlling shares in both companies.

Most recently in 2021, Novozymes and Novo Nordisk Pharmatech announced a partnership to jointly develop enzymes for pharmaceutical applications. The Novo Nordisk Foundation’s joint majority stake in both companies helped facilitate this new collaboration.

Current Ownership Structure

Today Novo Nordisk and Novozymes operate as two completely independent companies with separate ownership structures. Novozymes has been a publicly traded company listed on the NASDAQ OMX since 2000, when it separated from Novo Nordisk through an initial public offering (IPO).

As of 2023, Novozymes has over 60,000 shareholders and no single majority owner. The Novo Foundation, which is also the main owner of Novo Nordisk, holds approximately 25% of the shares in Novozymes. The rest of the shares are widely held. Novozymes Website

Novo Nordisk, on the other hand, has a controlling shareholder in the form of the Novo Foundation. The Novo Foundation holds about 70% of the total share capital which gives it control of the company. The remaining 30% is publicly traded on the stock exchange. Therefore, while the two companies share a common history and the Novo Foundation as a major investor, they have completely independent ownership structures today.

Business Relationship Today

Despite not having direct ownership ties, Novozymes and Novo Nordisk maintain an important business relationship today. According to Novozymes’ website, “Together, Novozymes and Novo Nordisk Pharmatech, who both have a joint majority ownership by the Novo Nordisk Foundation, will develop such high performance enzymes.”

This shows there is ongoing collaboration between the two companies, especially in developing new enzymes. As recently as November 2021, Novozymes and Novo Nordisk Pharmatech announced a partnership to jointly develop technical enzymes for pharmaceutical applications (https://www.novozymes.com/en/news/novozymes-and-novo-nordisk-pharmatech-are-joining-forces-develop-best-class-technical-enzymes). The partnership leverages the synergies between the two companies due to their common majority ownership under the Novo Nordisk Foundation.

While no longer officially connected through ownership, Novozymes and Novo Nordisk maintain strategic partnerships and collaborate in key business areas like enzyme development.

Financial Relationship

Novozymes and Novo Nordisk have an intertwined financial relationship due to their joint majority ownership by the Novo Nordisk Foundation. The Foundation owns 25.5% of Novo Nordisk shares and 71% of Novozymes shares as of 2022 (Our leadership team and ownership structure). This gives the Foundation significant influence and control over both companies.

The Novo Nordisk Foundation also provides funding and investments to Novozymes and Novo Nordisk. In 2021, the Foundation granted DKK 1.3 billion to Novozymes for research and development activities (Novozymes Annual Report 2021). The Foundation views its ownership stakes in Novo Nordisk and Novozymes as a long-term commitment to promote research and development.

While Novozymes and Novo Nordisk operate as independent companies with separate management teams and business strategies, their close financial ties via the Novo Nordisk Foundation have fueled perceptions that the companies have a joint ownership.

Leadership Connections

While Novozymes and Novo Nordisk are separate companies today, there have been several executives who have worked at both companies over the years. This has led to leadership connections between the two organizations.

For example, Novozymes’ current CEO Esben Laursen previously held various executive positions at Novo Nordisk from 1994 to 2000, including senior vice president of IT, logistics and quality operations. He went on to join Novozymes in 2001 and worked his way up to become the CEO in 2013.

Additionally, Novozymes’ CFO Prasad Chalasani was previously the CFO of Novo Nordisk from 2000 to 2003 before joining Novozymes. And Novozymes’ chief business officer Anders Lund worked in various executive roles at Novo Nordisk for over 10 years before becoming the CFO of Novozymes in 2003.

So while the two companies operate independently today, there have been many senior leaders who have worked across both organizations over the years. These connections have facilitated collaboration and knowledge sharing between Novozymes and Novo Nordisk.

Reasons for Perceived Association

Although Novozymes and Novo Nordisk operate as separate companies today, there are several reasons why people may think they have an ownership connection or are the same company:

— Novozymes was originally part of Novo Nordisk before being spun off into its own company in 2000. The historical ties between the two companies lead some to believe they are still connected.

— Both companies have the word “Novo” in their names and are based in Denmark. This naming similarity creates an impression that they are associated.

— Novozymes and Novo Nordisk collaborate on some enzyme technology and share a supplier relationship. Their business partnership causes some confusion about whether one owns the other.

— Novo Nordisk owned over 25% of Novozymes stock after the company was spun off, retaining a large stake. Although Novo Nordisk has since divested its ownership, some believe it still has financial ties.

— The leadership at both companies has some overlap, with a few shared board members and managers. This can appear like common ownership from the outside.

— Both companies are leaders in biotechnology and enzymes for industrial use. Their common industry and geographic location lead to the perception of being connected.

Conclusion

In summary, while Novozymes and Novo Nordisk have a long history together and some overlapping ownership, they are distinct companies today. Novozymes was originally a part of Novo Nordisk but became an independent company in 2000. Both companies have the Novo Nordisk Foundation as a majority shareholder, owning 25.5% of Novozymes shares and 25.1% of Novo Nordisk shares as of 2021. This gives the Foundation significant influence but not outright control or ownership.

Despite having a shared origin and major shareholder, Novozymes and Novo Nordisk operate as separate entities with their own leadership, business models, and product portfolios. They maintain a business relationship, including some partnerships in enzyme technology, but make decisions independently. Overall, while the two companies are closely tied historically and financially, Novozymes has been an independent, publicly-traded company for over 20 years now. The perception of Novozymes being owned by Novo Nordisk is outdated and no longer accurate.