A weight-loss drug has led its manufacturer, pharmaceutical giant Novo Nordisk, to position itself as Europe’s most valuable company, dethroning French luxury conglomerate LVMH (Louis Vuitton).
The Danish company’s shares rose a day after the launch of the drug Wegovy in the UK, a treatment that has also been in huge demand in other countries.
At the close of trading on Monday, the company had a stock market valuation of US$428 billion.
Wegovy is an obesity treatment that is injected once a week and gives people a feeling of satiety, so patients eat less and lose weight.
Among the well-known personalities using Wegovy is billionaire Elon Musk, but it is also popular among Hollywood artists and the general public in the US after the drug was approved by the US regulator in 2021.
Both Wegovy and Ozempic, a diabetes treatment with similar but not uncontroversial effects, have been described as “miracle” drugs.
However, experts warn that the injections are neither a quick fix nor a substitute for a healthy diet and exercise.
In tests, users often regained weight after stopping treatment.
“Victim of his own success.”
Given the high demand for Wegovy, Novo Nordisk has had to make limited shipments to several countries as it works to increase manufacturing.
Sophie Lund-Yates, senior equity analyst at Hargreaves Lansdown, told the BBC’s Wake Up to Money program that Novo Nordisk was “very surprised” at the high uptake of the treatment, putting the company in a position of a “victim of its own success.”
“There are people saying we should take a step back and make sure it’s used properly and responsibly. Of course, with a lot of fanfare for a drug you run the risk of a lot of consequences down the road,” Lansdown said.
In the United Kingdom, National Health Service guidelines say patients can only access Wegovy, which contains the drug semaglutide, if they are significantly overweight and have weight-related health problems.
According to the Organisation for Economic Co-operation and Development (OECD), nearly one in three adults is obese in the UK, which is the highest level in Europe.
In the United States, where according to data from the Food and Drug Administration 70% of the adult population suffers from obesity or overweight, it was approved for use in 2021 in combination “with a low-calorie diet and increased physical activity”.
“Wegovy works by mimicking a hormone called glucagon-like peptide-1 (GLP-1) that targets areas of the brain that regulate appetite and food intake,” the U.S. regulator said in announcing its approval.
Last month, a new trial showed that Wegovy reduces the risk of stroke and heart attack.
While the results of those studies have yet to be corroborated, experts agreed that the evidence is potentially significant.
Nearly 100 years after its founding in Denmark, Novo Nordisk is one of the world’s pharmaceutical giants.
In 1923, it was among the first companies to produce insulin for the treatment of diabetes, a condition related to obesity, which has been one of its main branches of treatment offerings.