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Edited by: TJVNews.com
Novo Nordisk, the Danish pharmaceutical company, has achieved a valuation exceeding $500 billion, surpassing luxury goods giant LVMH, making it Europe’s most valuable company. According to the information provided in a report in the New York Post, this milestone comes on the back of the skyrocketing popularity of the weight loss drugs Ozempic and Wegovy, initially marketed as treatments for diabetes. Novo Nordisk’s stock price surged nearly 5% to around $114 following the release of better-than-expected quarterly earnings.
In its latest earnings report, Novo Nordisk revealed a 37% year-on-year increase in fourth-quarter sales, reaching $9.61 billion, exceeding the $9.08 billion forecast by analysts. As was reported in the Post, earnings before interest and taxation (EBIT) rose by an impressive 57% to $26.8 billion, surpassing the forecast of $24.9 billion. The robust performance has positioned Novo Nordisk as a leader in the pharmaceutical industry.
The success of Ozempic and Wegovy, both containing the same active ingredient, has played a pivotal role in driving Novo Nordisk’s valuation to new heights. The company projected sales growth for the year to range from 17% to 25%, with operating profit expected to rise between 19% and 27%. The report in the Post said the weight-loss drugs have become highly sought-after, and Novo Nordisk intends to enhance its US supplies of Wegovy, aiming to compete with Eli Lilly, a rival pharmaceutical company.
Novo Nordisk CEO Lars Fruergaard Jorgensen acknowledged the competition in the weight-loss drug market, especially with Eli Lilly’s success in the sector. As was noted in the Post report, he expressed a welcoming attitude toward competition and emphasized that the growing obesity drug market, predicted to exceed $100 billion by 2030, has room for multiple drugs.
Jorgensen told Reuters that his firm is keeping close tabs on Lilly, according to the Post report.
“I think most likely they have a situation like ours where they’re building capacity and have to look at tactics market by market,” he told Reuters in an interview on Wednesday. “They, I’m sure, look at what we do, and we will be looking at what they do. That’s how competition plays out.”
Eli Lilly’s weight-loss drug, Zepbound, received approval in the US, the European Union, and Britain in November. The Post reported that while prescriptions for Zepbound in the US have witnessed significant growth, reaching 37,000 in the week ending January 19, they are yet to match the demand for Wegovy, which totaled 92,000 in the same week.
Despite the success, meeting the rising demand for weight-loss drugs poses a challenge. Eli Lilly faced shortages of Zepbound in US pharmacies, and Novo Nordisk expects periodic shortages as it works to address the surging demand, as per the report in the Post. The competition between Novo Nordisk and Eli Lilly is poised to shape the future landscape of the obesity drug market.
