Novo Nordisk, maker of Wegovy and Ozempic, is now the most valuable company in Europe

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Wegovy packages move along a conveyor at Novo Nordisk’s production facilities in Hillerod, Denmark, on Monday, June 12, 2023.


Novo Nordisk has dethroned Bernard Arnault’s LVMH luxury goods giant as Europe’s most valuable company.

Shares of the Danish drugmaker are up 40% so far this year, helped by exploding demand for weight-loss drugs Wegovy and Ozempic.

At the close of trading on Monday, the market capitalization of Novo Nordisk (NVO) was DKK 2.96 trillion ($428 billion). LVMH’s market capitalization About $416 billion. The French company, which sells Louis Vuitton handbags and Hennessy cognacs, has been hit hard by the slowdown in the Chinese economy. Its shares have fallen 8% over the past six months, paring this year’s gains to 12%.

Wegovy and Ozempic sales have skyrocketed in recent months. Ozempic is a medication developed to treat type 2 diabetes that contains the same active ingredient found in Wegovy, which some doctors have prescribed to patients to help them lose weight.

Novo Nordisk posted another gain on Monday when the company announced that Wegovy will now be available in the UK “through a controlled and limited launch.”

England’s taxpayer-funded NHS – a huge buyer of medicines – It confirmed that it would make Wegovy available as an “option” for weight management. Availability will be limited to patients with “at least one” weight-related condition, such as high blood pressure or cardiovascular disease.

“The launch of Wegovy has the potential to help thousands and reduce the number of people suffering from weight-related illnesses,” said UK Minister for Health and Social Care Steve Barclay. to publish On X, the platform formerly known as Twitter. This new generation of drugs (has) the power to change the rules of the game.

Novo Nordisk is already struggling to keep up with runaway demand for Wegovy, which clinical trials have shown can help people lose 15% of their body weight after as little as 16 months. The recently published results of a five-year trial of Wegovy’s effect on cardiovascular disease also showed that the drug reduced the risk of heart attack, stroke, or heart-related death by 20%.

wigs It’s currently available in a handful of countries outside the US, but the company is already ramping up production and said Monday that it expects supply to be “constrained for the foreseeable future.”

Carsten Sniberg/Bloomberg/Getty Images/File

Novo Nordisk headquarters, modeled after an insulin molecule, in Copenhagen, Denmark, on Sunday, June 25, 2023.

According to the World Health Organization, more than 1 billion people worldwide are obese, which means they have a body mass index (BMI) above 30.

“We’re just scratching the surface,” Lars Froergaard Jorgensen, CEO of Novo Nordisk, told CNN’s Meg Terrell in a recent interview. “I have a feeling it may take several years before we really meet the demand that is there.”

He added that the company is investing billions of dollars to increase capacity and operate its factories “24/7”.

Novo Nordisk made a profit of around DKK 49 billion ($7 billion) during the first six months of this year, up 30% from the same period in 2022.

The boom in sales of these drugs has led to an influx of US dollars into the Danish economy, which has led to an appreciation of the Danish krone. The Danish central bank responded by keeping interest rates lower than those set by the European Central Bank, discouraging foreigners from buying krone and devaluing the currency.

The company expects stronger growth in the future. It now expects its dividend to increase by up to 37% this year, well above the maximum increase of 19% it predicted in February.

Not everyone is convinced that the growth will translate into more gains for Novo Nordisk stock. Analysts at UBS reiterated their recommendation to sell the shares in a research note published on Tuesday, citing uncertainty about health providers’ willingness to pay for Wegovy.

They said limited healthcare budgets mean that “the influx of obese patients is likely to become increasingly restricted”.

“We’re not arguing about the fact that the world is facing an obesity challenge…we’re arguing that the problem is so complex, and that pharmacology today is so expensive, that no plausible health economics can be presented.”

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