Novo Nordisk – A European Blockbuster Story



By Jean Strock 28 September 2023

One of the big stories in health (and markets) in 2023 has been the new GLP-1 agonist class of drugs. Ozempic was the original blockbuster medication for Type 2 diabetes sold by Danish company Novo Nordisk. Then came Wegovy from the same company, which contains the same active ingredient but is FDA approved for chronic weight management. Novo Nordisk’s share price has increased by 36% since January this year and its operating profit is up 32%. The major limiting factor is the company’s ability to keep up with the huge demand and addressable market.

The new drugs mimic GPL -1, a hormone produced when we eat. It stimulates insulin secretion to reduce blood sugar and slows the emptying of the stomach, meaning you feel full for longer on smaller meals. It also binds to receptors in the brain that control hunger.
The market is huge with obesity affecting four out of ten Americans1 and rates of obesity rising globally. The five-year SELECT study published in August also found Wegovy reduced the risk of cardiovascular events by 20%.

US insurers do not currently cover the USD$1,000 per month cost of Wegovy for obesity treatment. However, if their use comes with other benefits they may be forced to. Currently the US populations most at risk of obesity and cardiovascular disease are the least likely to afford the drugs and the medical costs for people with obesity can be 30 -40% higher than the non obese2. In New Zealand one in three adults are classified as obese with rates higher in the Pacific Island and Maori populations.3

Denmark has a similar population size to New Zealand at 5.9 million. Novo Nordisk is now one of the largest companies in Europe having pulled equal with LVMH* the luxury goods company. Novo Nordisk is larger than the next ten Danish companies combined and its market capitalisation exceeds the yearly GDP of the Danish economy.

Economists worry that Denmark becomes too dependent on Novo Nordisk in much the same way the Finnish economy was dominated by Nokia prior to the era of smartphones. Risks for Novo Nordisk include unknown long term side effects and competition for such a huge market opportunity.

US company Elli Lilli is another in this space with its competitor drug Mounjaro. Pfizer and Amgen are also trialing their own weight loss drugs with the race on to beat Novo Nordisk’s once a week injectable with an oral version in pill form.
Losers so far include Australian company ResMed which makes sleep apnoea equipment and companies that make insulin pumps such as Insulet.

It will be fascinating to see how this plays out.


Global equity managers used by Saturn currently provide clients with exposure to Novo Nordisk and Eli Lilli.

*Louis Vuitton, Moet, Hennessey – also in the portfolios!

1 Forbes Health, Obesity Statistics

2 Public Health Considerations regarding Obesity 20 12 2022 NIH US

3 Ministry of Health – NZ Health Survey 2020/2021