Mixed reactions have been received in Denmark by the sudden surge of interest in Wegovy
What happens when you find a weight-loss drug that is a “miracle”, and may even be the best-selling medicine of all time. Of course, throw a big party.
Novo Nordisk hosted “Denmark’s wildest employee party” in late November. The company is behind the slimming jab Wegovy that launched in the UK Monday.
The company held a day-long festival in Roskilde for 10,000 of its employees, a place that had only two months before hosted one Europe’s biggest music festivals.
It called Tobias Rahim a “phenomenon”, a half Kurdish and half Danish pop star.
It’s a good time to celebrate. Novo Nordisk has seen its value nearly double in one year due to the success of Wegovy and Ozempic a closely related diabetes treatment developed by the firm.
The company is struggling to meet the demand from everyone, including Boris Johnson and Elon Musk.
The revenue jumped by one quarter to 176 billion Danish krone (£20 billion ) last year, driven by an increase of 101pc in the sales of Wegovy as well as another weight-loss treatment called Saxenda.
Analysts believe that the company may have discovered one of the most successful medicines ever. Sales are expected to increase by up to 33pc in this year, a remarkable feat considering the company is 100 years old.
The scale of Novo Nordisk’s success is not to be understated. After a recent rise in its share value, Novo Nordisk is now worth almost £340bn. This is more than the Danish economy produces annually.
The company is the largest Danish business, and it is almost as valuable as the most valuable European company.
Denmark’s National Bank has stated that the country would have been in recession if not for the company’s rapid growth.
The meteoric rise of the company in a small Scandinavian nation of six million people has been met with both euphoria, and concern.
Novo Nordisk is a company that has many ordinary Danes as shareholders. Locals are proud to have a national champion who brings huge profits into the country. The company spends heavily on new factories in areas that would otherwise be deprived of investment.
There are some concerns about an over-dependence on a single business if the boom turns into a bust.
Las Olsen is the chief economist of Danske Bank. He says, “There are many big companies in Denmark, and they are all important, but we have never had anything as large and growing so fast.”
Novo Nordisk has been the largest taxpayer in Denmark for many years and this is only going to increase.
August Krogh, Nobel Prize-winning physiologist, founded the company in Denmark. The company was the first to manufacture and sell insulin in Scandinavia. Today, it produces about half of all the insulin used worldwide.
The company has made a good business for decades by supplying insulin, but its recent success is fueled by the weight-loss drug Wegovy. It has been shown to help patients lose as much as 12pc of their bodyweight .
The drug works by reducing appetite. This allows people who struggle to adhere to strict diets and exercises to still lose weight.
The diabetes medication Ozempic has been a big seller. It has also proven to be prescribed by doctors for obesity off-label.
Last month, a study showed that Wegovy reduces the risk of a heart attack by a fifth. This gave health insurers an additional incentive to cover it.
Wegovy has been dubbed “miracle drug” in the media because of its incredible clinical results, and breakthrough in treating obesity.
In Denmark, the treatment has undoubtedly brought about an economic miracle.
Olsen, who is the CEO of Novo Nordisk, says that if not for the sales growth in Novo Nordisk, there would actually have been a decline in Danish GDP.
In a recent publication that outlined the future of the Danish economy, the Economy Ministry referred to Novo Nordisk at least 31 times.
In a recent press conference, Jakob Ellemann Jensen, the minister of economy acknowledged that spotlighting one company so often was “a little bizarre” and that “it’s not something that normally happens”.
Novo Nordisk would have a negative impact on the economy if it were removed from the equation. “But fortunately, it’s part of the equation,” said he at a recent press conference.
Recently, one of the largest financial papers in the country published an article that asked if the Danish economy would soon become a subsidiary to Novo Nordisk.
In a mobile global economy, relying on one company is a risk. Ellemann-Jensen acknowledged that Denmark must “ensure Novo Nordisk keeps being [here] to avoid losing the income, number of jobs, and pride we all feel.”
Birthe Larsen of the Copenhagen Business School says that there is always a risk when a nation becomes “too reliant on one company”.
Nokia, a Nordic neighbor nearby, is a cautionary story. At one time, the mobile phone pioneer accounted for about a fifth in Finnish exports.
Sales of smartphones plummeted quickly after Apple launched the iPhone in 2007.
Nokia’s troubles have been blamed by many for the stagnation of the Finnish economy for more than a decade.
Olsen: “If you win a great deal, you could also lose a great deal.” It is clear that Novo Nordisk could face a reverse situation one day.
The biggest risk would be that rival pharmaceutical companies could develop a new drug that can surpass Wegovy or Novo Nordisk might decide to move for whatever reason. The majority of pharmaceutical companies are racing to create their own weight-loss jab.
Olsen says that if boom turns to bust, “then all of the effects would be reversed”. “Shareholders get less money, government gets less tax, good jobs disappear, and GDP declines,” says Olsen.
Olsen is confident that Novo Nordisk will remain in Denmark because of its deep roots and highly-skilled workforce.
Olsen: “Of Course, if we rest on our laurels, become complacent, and say ‘Oh we don’t really have to make any effort’, we create [this risk] in the future.”
But that’s not what the situation is right now.
He believes that the Danish economy can withstand unexpected shocks. In the past, the country has adapted to declines in once-important industries like textiles and agriculture.
We are used to large shifts.
The Danes have enjoyed the benefits of their miracle drug for the time being. Why not enjoy the party while you can?