In the leafy middle-class suburb of Bagsværd, near a lake north-west of Copenhagen, the drugmaker Novo Nordisk’s white circular headquarters rise from the ground like a giant flying saucer. The building looks like a sci-fi film set made by Lego, another stalwart of the Danish economy.
Thanks to booming demand for its weight loss treatment Wegovy, the Danish business last week became Europe’s biggest company by stock market value, overtaking the previous holder of that title, French luxury group LVMH. Novo Nordisk’s stock market value of £340bn now exceeds Denmark’s entire economic output, estimated at £323bn this year.
The surge in overseas sales of the drug has pushed up the value of the Danish krone, forcing the country’s central bank to keep interest rates lower than it otherwise would in order to rein in the value of the currency. The krone is pegged to the euro in order to facilitate trade with the euro area.
“Novo Nordisk is clearly making an impact on the country in many ways,” says Jens Naervig Pedersen, chief analyst at Danske Bank. “It’s even making an impact on interest rates. We are in a situation where a weight loss drug and a pharmaceutical company are so successful that it’s impacting the interest rates of a small country.”
After 100 years in business, quietly producing insulin and other diabetes medicines, the company turned to weight control, which led to the launch of Wegovy two years ago and proved a transformational move. In a country of just under 6 million people, Novo Nordisk has grown so big it is dominating, and even distorting, the Danish economy.
At dinner parties across Denmark, Wegovy and the company behind it have become a big topic of discussion. “It’s all over the newspapers, TV and so on, in the light that it’s the most valuable company in Europe,” says Søren Kristensen, chief economist at Danish bank Sydbank.
Every summer, Novo Nordisk throws a big staff party – a festival for 15,000 people with tents and music stages in Roskilde, to the west of Copenhagen – and this year’s event, at the end of August, was big enough to cause traffic jams in Zealand, the island on which the capital stands.
There is also a hiring boom as the company, struggling to keep up with soaring demand for its weight loss drugs, expands its factories, with plans to build a new production site in Odense, on the adjacent island of Funen. “The impact will stretch across Denmark,” says Kristensen.
Thanks to the drugmaker, Denmark has on paper at least avoided the economic slump experienced by its neighbours Germany and Sweden. It would be technically in recession now(defined as two consecutive quarters of contraction), as the rest of the country’s industry is in decline, economists say. Without the contribution of the pharmaceutical sector, Danish industry would have slumped by 15% over the past year.
It is quite a turnaround for a company that has battled falling insulin prices, and six years ago was contemplating a string of acquisitions to breathe new life into its drugs portfolio. At the time, it also paid $59m in the US to settle claims that its sales staff gave doctors misleading information, although it continued to deny wrongdoing. .
The launch of Wegovy in the UK last week has been preceded by a slick PR campaign. The company spent millions of pounds on obesity experts and organisations – in donations, event sponsorship, healthcare training programmes, charity projects and consultancy fees, the Observer revealed in March.
The same month, it was suspended from the Association of the British Pharmaceutical Industry (ABPI) for two years, for “serious breaches” of the industry group’s code of practice, after a row over sponsored weight loss courses that promoted its medicines.
The company said at the time that it was “disappointed” but accepted the decision, and was committed to following the ABPI’s code of practice and “maintaining the highest possible ethical standards required by the pharmaceutical industry”.
Wegovy, which users inject once a week, suppresses the appetite by mimicking the action of a gut hormone called GLP-1 that is released after eating. It will be available in a “controlled and limited launch” on the NHS, and for private sale at pharmacies. However, many pharmacies are waiting for supplies as global stocks of the drug are running low.
The craze for the drug, and the company’s equally popular diabetes medicine Ozempic, has been fuelled by Hollywood A-listers and other celebrities.
Tesla billionaire Elon Musk, the owner of Twitter, which was recently rebranded as X, tweeted last November: “Fasting + Ozempic/Wegovy + no tasty food near me.”
At the Oscars in March, host Jimmy Kimmel namechecked the drug in his opening monologue.
“Everybody looks so great. When I look around this room, I can’t help but wonder, ‘Is Ozempic right for me?’” he said.
Denmark has no shortage of multinationals: they include toymaker Lego, brewer Carlsberg and shipping group Maersk. But never before has one company been so dominant.
“We’ve had other large companies which have been big in the global economy, but not anyone of this size,” says Pedersen at Danske Bank. Last year, two-thirds of the country’s growth came from the pharmaceutical industry, led by Novo Nordisk.
Denmark’s economy ministry has doubled its growth forecast for 2023 to 1.2%. Its economic outlook report mentioned Novo Nordisk 31 times – unprecedented for any company.
But the picture is less rosy elsewhere in the economy. The latest figures show that Danish gross domestic product grew by 1.7% year on year in the first half of 2023, but would have shrunk by 0.3% without pharmaceutical output, which makes up 5% of the economy.The medical boom prompted Denmark’s statistics office to publish that analysis for the first time last week, and its economists are working out how to produce a full separate set of economic figures, similar to Norway, which publishes data that strips out oil companies.
Novo Nordisk made sales of 177bn kroner (£20bn) last year, up 26% from the year before, and a pretax profit of nearly £8bn. It lifted its profit outlook last month after raking in half-year sales of £12bn and profits of £5.6bn. It employs 59,000 people in 80 countries, two-fifths of them in Denmark, and serves almost 40 million patients globally.
The business dates back to 1923, when Nordisk Insulinlaboratorium was set up to commercialise the production of insulin – a drug that meant diabetes was no longer a death sentence and life expectancy would be improved dramatically. In 1989, it merged with Novo Terapeutisk Laboratorium, a company formed in 1925 by the Pedersen brothers, former employees of Nordisk. Its NovoPen was launched as the first insulin pen device in 1985.
Over the years, the group carved out a leading position in diabetes and weight loss medications. Its obesity drug Saxenda was approved in the US in 2014, while Ozempic was approved there in 2017, followed in 2021 by Wegovy – all of which have been flying off the shelves as alternatives to a gastric band. The company is working on a pill version of Wegovy.
However, there are potential side effects, which can range from unpleasant to harmful, such as abdominal pain, nausea, diarrhoea, constipation and feeling tired. Musk was asked last year on Twitter: “Does it [Ozempic] give you those nasty burps too? ... Taste like rotten eggs?” He replied: “Yeah, next-level.”
Potential long-term side effects listed for Wegovy and Ozempic, as well as rival pharmaceutical company Eli Lilly’s diabetes drug Mounjaro, include pancreatitis, risk of thyroid cancer and problems with the kidneys.
The craze for the latest slimming drugs has knock-on effects for people such as Ian, 52, from Burnham-on-Sea in Somerset, who has been taking Ozempic since last year for type 2 diabetes. His diabetes is caused by steroids that he has to take because he has an autoimmune disease. His weight has gone down from 98kg (15st 6lb) to 94kg, but he is struggling to get hold of the drug because of the shortages, and cannot afford to buy it online for between £250 and £300 for a month’s supply.
“Due to celebrities going online and press shouting how great it is, I can no longer get it either via my GP or hospital,” he says. “Chemists around a 15-mile radius from me have all said they will not have it in stock until next year.”
Global obesity rates have roughly tripled since 1975, according to the World Health Organization. In England, more than one in four people are obese, which means having a body mass index of 30 or above. The condition can be physically debilitating, causing loss of bladder control and life-limiting conditions.
The global weight loss and diabetes treatment market is estimated to achieve up to £160bn in annual sales within a decade, according to Emily Field, head of European pharmaceuticals equity research at Barclays, who described obesity as “the story of this decade”.
About 100 million people in the US are obese and only 3 million of them are receiving pharmaceutical treatment, says Jeffrey Stevens, a healthcare analyst at pharmaceutical data company Citeline. It is expected that patients will need to take the drugs long-term to maintain their weight loss.
Novo Nordisk received a further boost in August when a key clinical study showed Wegovy reduced the risk of stroke and heart attack by 20% in overweight or obese people. Researchers are also looking at whether weight loss drugs could treat other conditions, ranging from alcohol misuse to dementia.
US rival Eli Lilly’s diabetes injection Mounjaro has shown even better results in weight loss than Wegovy and it is expected to receive US regulatory approval for obesity before the end of year. Analysts at UBS said last year that it could become one of the “biggest drug[s] ever”, with the potential to make £20bn in peak sales.
Novo Nordisk, Eli Lilly and US rival Pfizer are also racing to bring to market new weight loss pills, which are cheaper to manufacture and easier to take than jabs.
Other new treatments include Imcivree, manufactured by Rhythm Pharmaceuticals, aimed at obese people with rare genetic conditions, which has been approved in Canada.
Experts stress that obesity is a very complex disorder and that weight loss drugs need to be used alongside healthy diet and exercise, and therapeutic support.
James Bethell, a Conservative peer and former health minister who co-chairs the all-party parliamentary group on obesity, says: “It’s fantastically good news that we seem to be moving towards finding some pharmaceutical ways of addressing obesity.”
However, Lord Bethell warns against the “massive temptation” for politicians to ditch a healthy food strategy and bet on weight loss drugs instead.
