The soaring popularity of weight loss drugs Ozempic and Wegovy has catapulted parent company Novo Nordisk’s valuation past the half-trillion dollar threshold, according to a report.
The Danish pharmaceutical company, which initially marketed the drugs as a treatment for diabetes, has a valuation of $506 billion, according to CNBC, which analyzed data from the London Stock Exchange Group.
Novo Nordisk’s stock price was up by nearly 5%, at nearly $114, after the company released better-than-expected quarterly earnings Wednesday.
The stock surge vaulted the drugmaker ahead of luxury goods giant LVMH to claim the title of Europe’s most valuable company.
In its latest earnings report, fourth-quarter sales rose 37% from a year earlier to $9.61 billions, compared with $9.08 billion forecast by analysts in an LSEG poll.
Earnings before interest and taxation (EBIT) rose 57% to 26.8 billion, versus a forecast of 24.9 billion.
Novo Nordisk projected sales growth this year to range from 17% to 25% and operating profit to rise 19%-27% as demand soars for the two medications — which contain the same active ingredient.
Novo said it would boost US supplies of Wegovy and also pledged to compete with rival Eli Lilly, which has seen success with the marketing of its own weight-loss drug, Mounjaro.
Novo and Lilly’s drugs are the most effective treatments for weight-loss approved to date.
Lilly’s presence in the sector has strengthened after it won approval in November in Britain, the European Union and the US for its powerful obesity drug Zepbound.
Novo CEO Lars Fruergaard Jorgensen told Reuters that his firm is keeping close tabs on Lilly.
“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.”
Jorgensen has previously said he welcomes competition, and that there is room for multiple drugs in the fast-growing obesity drug market, which analysts predict could be worth more than $100 billion by 2030.
US prescriptions of Zepbound have soared since the drug hit US shelves in early December, reaching 37,000 in the week to Jan. 19, data from healthcare data firm IQVIA and JPMorgan showed.
But they have yet to catch up with Wegovy, which totaled 92,000 in the same week, below the peak of 135,000 hit last May.
A major hurdle is meeting ferocious demand.
Eli Lilly has declined to say how much Zepbound and Mounjaro it will be able to make this year as it expands its North Carolina plant, turns to contract manufacturers and builds a plant in Germany.
US pharmacies have reported shortages of Zepbound this month, though the company predicted that would end in February.
On Wednesday, the Danish drugmaker said it was more than double US deliveries of lower doses compared with recent months, the first sign of progress in easing shortages after a year-long effort to ramp up output.
Still, it expects periodic shortages.
With Post Wires
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