Novo Holdings Slows Investment Amid Economic Uncertainty Following Trump's Tariff Actions

Novo Holdings CEO Signals Caution in Investment Strategy

Kasim Kutay, CEO of Novo Holdings, has announced that the $160 billion fund will decelerate its investment activities in response to the economic uncertainty caused by the Trump administration's recent tariff policies. This decision comes as a significant shift for the fund, which deployed 34 billion Danish krone ($5.2 billion) in life sciences investments last year.

"Until there is more clarity on the prospects for economic growth, we will slow down our investment activities," Kutay told Bloomberg. "We're in the midst of uncharted waters."

The fund, best known as the controlling shareholder of Novo Nordisk, is adopting a wait-and-see approach as the global economic landscape becomes increasingly unpredictable. This cautious stance could have far-reaching implications for the biotech sector, particularly for companies seeking to raise capital.

Impact on Biotech Investments and IPOs

Novo Holdings' venture investments group, which has been a significant player in the biotech funding landscape, may see a slowdown in its typically active investment strategy. Last year was one of the most prolific in the group's 25-year history, with investments in companies such as Alentis Therapeutics, Amolyt, Edgewise, Numab, and Vaxcyte.

The fund's venture portfolio, valued at 16 billion Danish krone ($2.4 billion) at the end of 2024, comprises approximately 60 companies, two-thirds of which are private. Planned exits for some of these assets, originally scheduled for this year, may now be postponed to 2026.

Kutay expressed skepticism about the current market conditions for initial public offerings (IPOs), stating, "I mean, who's going to IPO an asset in this environment? Unless you have to, it's probably not advisable." He added, "The view on interest rates, which is a key barometer and a driver of how and when to invest, is all over the place."

Broader Industry Implications

The cautious approach adopted by Novo Holdings aligns with concerns expressed by other industry leaders. Roche CEO Thomas Schinecker recently commented that tariffs could make it "more difficult to make financial sense of any M&A deals." Similarly, Merck & Co. CEO Rob Davis acknowledged that the current situation "clearly... makes it more complex to get things done because [of] the uncertainty everyone is wrestling with."

These statements from industry executives highlight a growing trend of hesitation in the pharmaceutical and biotech sectors, as companies grapple with the potential impacts of trade tensions and economic volatility on their strategic decisions.