Novo Nordisk Foundation

The Novo Nordisk Foundation is an international enterprise foundation focusing on medical treatment and research.

Novo Nordisk Foundation
Founded1989 (1989) in Denmark
TypeFund
HeadquartersHellerup, Denmark
FieldsLife-sciences, natural sciences, social sciences
Endowment$117 billion USD (805 billion DKK) in 2022[1]
Websitenovonordiskfonden.dk/en

In 2022, the foundation had a net worth of $107 billion (805 billion DKK),[2] making it the wealthiest charitable foundation in the world. Novo Nordisk Foundation owns Novo Holdings A/S, a holding company that is the majority shareholder of Novo Nordisk, a Danish pharmaceutical corporation.[3]

From 2016 to 2022, the foundation distributed more than US$ 4.5 billion in grants for research, innovation, treatment, education, humanitarian and social purposes.[4][5]

In 2022, the foundation awarded grants worth $1.09 billion[4] (7.5 billion DKK) and paid out $0.79 billion (5.2 billion DKK).[4]

The Foundation typically distributes more than US$300 million each year to research within the fields of Life sciences and Bioscience.[6] While the main focus lies within biomedicine and biotechnology research, the Foundation also awards grants for research in general practice and family medicine, nursing and art history.

History

In 1922, Danish professor August Krogh received permission to produce insulin in the Nordic countries. This sparked the development of new diabetes treatments and the beginning of a Danish business and export venture. Several foundations were also established which have subsequently merged into the Novo Nordisk Foundation.[7]

In recent years, the Foundation has increased its focus on innovation, diabetes treatment and grants for humanitarian and social purposes. In 2016 the Foundation awarded a little over 420 million US dollars to the Capital Region of Denmark to establish Steno Diabetes Center in Copenhagen, a diabetes treatment and research institution.[8][9]

Constellation and ownership structure

The Novo Nordisk Foundation is an established enterprise foundation. It is a self-governing entity with no owners, focusing on long-term ownership of the Novo Group (Novo Nordisk and Novozymes) while combining business and philanthropy within scientific, humanitarian and social purposes. The Novo Nordisk Foundation's investment activities are managed by its 100%-owned subsidiary, Novo Holdings A/S whose sole purpose is to invest the foundations wealth and ensure financial returns.

Constellation of ownership in Novo Nordisk Foundation
Ownership structure. The Novo Nordisk Foundation owns 100% of Novo Holdings A/S who owns shares in Novo Nordisk and Novozymes

Novo Holdings A/S is also the holding company for the foundation's ownership in Novo Group (Novo Nordisk and Novozymes).[10][11][12]

Ownership structure

The Novo Nordisk Foundation is obligated to maintain its controlling ownership in the Novo Groups two largest companies: Novo Nordisk and Novozymes.

  • The foundation owns class A and B-shares in Novo Nordisk corresponding to approximately 28 percent of the total equity and approximately 75 percent of the total voting rights.[10]
  • The foundation owns class A and B-shares in Novozymes corresponding to approximately 25 percent of the total equity and approximately 71 percent of the total voting rights.[10]

The class A-shares in both companies (Novo Nordisk and Novozymes) are unlisted and cannot be traded. The voting weight of the A-shares are 10 times those of B-shares in both companies.

Profits and taxation

The Novo Nordisk Foundation receives cashflows and profits from paid dividends from Novo Holdings A/S. The paid dividends are taxed in the underlying companies in correspondence with Danish corporate tax laws, prior to being paid out as dividends.

Endowment

The Novo Nordisk Foundation is the primary owner of Novo Nordisk A/S and Novozymes A/S through the foundation's subsidiary company Novo Holdings A/S.[13] Aside from Novo Nordisk and Novozymes, the foundation is also a major shareholder in more than 75 other companies. The foundation's financial endowment is maintained by dividends and returns on these investments.

Distribution of grants

The foundation has an objective of providing support for scientific, humanitarian and social purposes.

The grants go primarily to support research in biomedicine, biotechnology, general medicine, nursing and art history at public knowledge institutions. Humanitarian and social purposes includes the Steno Diabetes Center research hospital.[14] In addition, the Novo Nordisk Foundation also awards a number of awards each year aiming to recognize and reward individuals for "outstanding research, teaching, or other support for research".[15]

Criticism of the Novo Nordisk Foundation's role in research and funding

The level of research funding concentration granted from enterprise foundations has consistently been a central issue in science policy discussions. Intensive concentration has been viewed both as a means to enhance and direct research investments effectively and as a concerning trend leading to excessive competition, reduced diversity, and the selection of conservative topics.[16]

There is a focus on evaluating potential imbalances in the distribution of research funds in Danish society regarding the role of the Novo Nordisk Foundation in advancing scientific research and innovation.[17]

One criticism is related to the foundation's significant economic influence in the research landscape. The substantial grants from the foundation may inadvertently overshadow other sources of research funding and potentially lead to a concentration of resources in certain research areas closely aligned with the foundation's priorities and interests.[18]

Arguments and debates put forth by skeptics are that the foundation's focus on specific research areas, such as biomedicine and health sciences, could potentially divert attention and resources away from other equally significant disciplines that have the potential to contribute to overall societal well-being.

Concerns have been raised about the potential influence of the foundation's agenda on the direction of scientific research. Critics express concerns about the potential effect of the foundation's allocation of funds on the diversity of research topics and perspectives within the Danish scientific community,[19] as it tends to prioritize projects that align with its strategic goals.[20]

Annual distribution summary

In 2022, the foundation distributed a total of DKK 7.5 billion[4] (approx $1.08 billion) and paid out DKK 5.2 billion ($0.76 billion) in grants.[21][4]

In 2021, the foundation distributed a total of DKK 8.8 billion[22] (approx $1.18 billion) and paid out DKK 4.8 billion ($0.65 billion) in grants.[23]

In 2020, the foundation distributed a total of DKK 10.17 billion[24] (approx $1.67 billion) and paid out DKK 4.6 billion ($0.75 billion) in grants.

In 2019, the foundation distributed a total of DKK 8.5 billion[25] (approx $1.29 billion) and paid out DKK 3.6 billion ($0.57 billion) in grants.

In 2018, the foundation distributed a total of DKK 3.9 billion[26] (approx $0.59 billion) and paid out DKK 1,75 billion ($0.28 billion) in grants.

In 2017, the foundation distributed support for DKK 5.8 billion[27][28] (approx $0.88 billion)

In 2016, the fund provided support for DKK 4.2 billion[27] (approx $0.64 billion).

COVID-19 pandemic

The Novo Nordisk Foundation contributed to support the fight against the COVID-19 pandemic in the spring of 2020.[29]

The foundation (as of June 2020) has donated DKK 366.2 million[30] (approx $55.77 million) for COVID-19 related measures.

  • Test centers in Denmark: DKK 250 million for 11 COVID-19 test centers throughout Denmark.[31]
  • Projects: DKK 74.9 million[32] for 43 different projects aimed at mitigating the health consequences of COVID-19 in Denmark.
  • Emergency production of ethanol: DKK 17.5 million granted in cooperation with The Carlsberg Foundation[33] for emergency production of ethanol for hand sanitizers and disinfection.
  • Research projects: DKK 6.6 million for three research projects.[30]
  • Trials: DKK 5 million[30] in support for trials for anti-inflammatory drugs against COVID-19 in collaboration with Rigshospitalet.

Leadership

The current chairman of the Novo Nordisk Foundation is Lars Rebien Sørensen and Mads Krogsgaard Thomsen is the current CEO.[34]

See also

References
  1. https://novonordiskfonden.dk/app/uploads/Novo-Nordisk-Foundation-Annual-Report-2022.pdf
  2. "For 2022, Novo Holdings reports a negative return on the Investment Portfolio of -6% and Total Income and Returns of DKK 3". Bloomberg. 12 April 2023. Retrieved 2023-05-26.
  3. "Form 6-K NOVO NORDISK A S For: Mar 31". StreetInsider.com. Retrieved 2020-06-14.
  4. 2022 Annual Report - Novo Nordisk Foundation: https://novonordiskfonden.dk/app/uploads/Novo-Nordisk-Foundation-Annual-Report-2022.pdf
  5. "Facts and figures". Novo Nordisk Fonden. Retrieved 2023-05-26.
  6. "Novo-fond fordobler støtte til forskning og gode formål". 18 March 2016.
  7. "History".
  8. https://www.linkedin.com/company/novo-nordisk-fonden
  9. "Novo Nordisk Foundation ready to centralise diabetes treatment in Denmark – the Post". Archived from the original on 2017-03-04. Retrieved 2017-03-03.
  10. "Ownership". Novo Nordisk Fonden. Retrieved 2023-05-26.
  11. Ownership constellation https://www.enterprisefoundations.dk/wp-content/uploads/2020/08/Novo-Nordisk-09.pdf
  12. Kaoutar. "Novo Nordisk Foundation - Bourses-etudiants.ma" (in French). Retrieved 2023-05-26.
  13. "Inside View: Novo Nordisk Foundation". Nature. 4 November 2015. doi:10.1038/nj0470.
  14. "What do we support?". Novo Nordisk Fonden. Retrieved 2023-05-26.
  15. "Novo Nordisk and Novozymes Prizes Awarded".
  16. MIT Press Direct: Concentration of Danish research funding on individual researchers and research topics: Patterns and potential drivers:https://direct.mit.edu/qss/article/1/3/1159/96125/Concentration-of-Danish-research-funding-on
  17. Finans.dk (Article in Danish): The balance of power is shifting: Novo Nordisk Foundation pays 10 per cent. of all public research in Denmark: https://finans.dk/erhverv/ECE12214153/magtbalancen-skrider-novo-nordisk-fonden-betaler-10-pct-af-al-offentlig-forskning-i-danmark/
  18. MedWatch.dk (in Danish): Researchers fear falling out of favor with the Novo Nordisk Foundation. https://medwatch.dk/samfund/article15890695.ece
  19. Information.dk (in Danish): External money distorts research. Here is an insight. https://www.information.dk/2019/11/eksterne-penge-skaevvrider-forskningen-indblik
  20. PolicyWatch.dk (in Danish): The Novo Nordisk Foundation finances more public research in Denmark. https://policywatch.dk/nyheder/virksomheder/article14447603.ece
  21. Nordic Society of Human Genetics & Precision Medicine: Novo Nordisk Foundation: Grant-giving Dip Is Temporary https://www.nshg-pm.org/Novo-Nordisk-Foundation-Grants-to-Increase
  22. Novo Nordisk Foundation - Annual report 2021: https://novonordiskfonden.dk/wp-content/uploads/Novo-Nordisk-Foundation-Annual-Report-2021.pdf
  23. Novo Nordisk Foundation 2021 grant report: https://novonordiskfonden.dk//app/uploads/2022/06/Grant_Report_2021-3.pdf
  24. Novo Nordisk Foundation 2020 Grants Report: https://novonordiskfonden.dk/wp-content/uploads/Grant-Report-2020.pdf
  25. Grant report 2019 https://novonordiskfonden.dk/wp-content/uploads/Grant-Rapport-2019.pdf
  26. Page 7 of the grant report 2018 https://novonordiskfonden.dk/wp-content/uploads/UK_GRANT_REPORT_2018.pdf
  27. "Novo-fonden uddeler rekordmange milliarder". 22 March 2018.
  28. "Novo Nordisk Fonden sætter rekord: Uddelte 5,8 mia. Kr. I 2017". 22 March 2018.
  29. "Novo Nordisk Foundation: Societal Responses to and Preparedness for Emerging Viral Infections – 2020 (Denmark)". 3 April 2020.
  30. "Initiatives - Covid-19".
  31. "New Danish agency will test up to 20,000 people a day for coronavirus". 21 April 2020.
  32. "The last round in Novo Nordisk Foundation's emergency coronavirus programme". 24 April 2020.
  33. "The Carlsberg Foundation supports emergency production of ethanol with DKK 8.7 million | Carlsbergfondet".
  34. "Board".
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