The whirlwind success of weight-loss treatment Wegovy is providing a bonanza not just for its developer, Novo Nordisk (NOVOb.CO), but also for its home country of Denmark.
Interviews with Danish economists, analysts, and executives at the Novo Nordisk Foundation which controls Novo highlight the benefits to the economy from jobs to private wealth – but also the potential pitfalls of relying on a single, outsized company.
“Danes are exposed to the success of Novo Nordisk, but also the risk – both because it is the most widely held stock in Denmark, and because of the company’s impact on our society,” Danske Bank investment strategist Lars Skovgaard Andersen said.
In August, the government cited Novo when it lifted its economic growth forecast for this year, to 1.2% from 0.6%. The drugmaker last month overtook LVMH (LVMH.PA) as Europe’s most valuable listed company, worth about 385 billion euros ($403 billion) – slightly more than Denmark’s gross domestic product.
“We have struck gold,” said Lars Christensen, research associate at Copenhagen Business School.
Novo’s success would bring broad benefits, he added, citing Danish pension savers whose schemes are typically big holders of Novo shares. The share price has nearly tripled since Wegovy was launched in June 2021.
Record profits for Novo are projected to generate returns for the Foundation of more than $12 billion in coming years. They will also boost tax revenues and employment.
Novo Nordisk added 3,500 jobs in Denmark in 2022, bringing the total in the country to 21,000 employees, out of 59,000 worldwide, a company spokesperson said.
Mads Krogsgaard Thomsen, the Foundation’s chief executive officer, said international press coverage of Wegovy was also enhancing Denmark’s image as a place that fosters scientific innovation.
Before Wegovy, “we used to be kind of, ‘Isn’t Denmark the place where Stockholm is the capital?'” he joked to journalists in Copenhagen on Tuesday.
Speaking later to Reuters, he acknowledged that Novo’s influence is growing as its profits soar.
“The Novo Group is of course becoming of bigger importance to Danish society,” Thomsen said. “To me, it’s the opportunity – literally I can liaise with the ministers of science, health, commerce, energy and climate …”
“We team up with the political system and the ministers, to make sure we are kind of aligned” on issues such as climate and sustainability in agriculture, he said.
Danish government officials did not respond to a request for comment.