The single company propping up an entire economy

But officials and politicians are feeling a bit nervous. It’s not so much a case of having all your eggs in one basket, as having a single enormous golden egg that fills the basket.

“There are other big companies in Denmark and they are also important, but we have not had something as big as this, and we have not had something growing as fast as this,” Danske Bank chief economist Las Olsen said recently. “Novo Nordisk is by far the biggest taxpayer in Denmark and that’s only increasing.”

Economy Minister Jakob Ellemann-Jensen described the situation as “a bit bizarre”. “Things wouldn’t be looking quite as good [for the economy] if you removed Novo Nordisk from the equation. But luckily, it is part of the equation,” he told reporters recently.

It’s not just Danes who benefit. If you’d bought yourself weighted exposure to the OMX Copenhagen 20 stock index at the start of this year, you’d be up almost 13 per cent. The 12-month growth has been 34 per cent, despite a few big Danish companies faring very badly. You’d be searching high and low for many other benchmark indices which could top that.

The question, of course, is whether those who still want to clamber aboard this Viking longship might have already missed the boat.

As is often the case when the wind is in the sails, the ride feels like it could go on and on. Obesity is a massive problem in the developed world, and a growing one in the developing world.

On some estimates, the number of overweight or obese people in the world could quadruple to 4 billion within the next dozen years. Morgan Stanley has estimated that 7 per cent of the US population alone could be taking weight-loss drugs by 2035.

The forecasts doing the rounds about what this means for weight loss and anti-obesity drugs? A market worth anywhere from $US70 billion ($108 billion) to $US140 billion by the start of the 2030s. At the top end, that would equal the entire market for cancer medicines.

Circling rivals

JPMorgan reckons Novo Nordisk can snare about half of this, sharing the spoils with US pharma giant Eli Lilly, whose diabetes drug Mounjaro should soon get US regulatory approval as a weight loss treatment.

Novo Nordisk potentially has something to worry about here. Mounjaro works in a similar fashion to Ozempic and Wegovy, but some studies suggest the American drug is even more effective. Needless to say, Eli Lilly’s share price has also been flying high, up 57 per cent this year and 86 per cent on a year ago.

On the plus side, JPMorgan says the Danish company has improved its ability to supply the US market. And it has got a jump on Eli Lilly in Britain and Europe, where it is causing a huge stir and demand is outstripping supply.

But the venerable trans-Atlantic pair won’t only be eyeing off each other. An obesity drug tracker from healthcare analysts STAT has counted almost 70 obesity treatments in development, of which two-thirds use the same mechanism as Wegovy and Mounjaro.

Copycat products are reportedly already appearing in China. Back on the more level playing field, Pfizer and Amgen are in the race, possibly leapfrogging the Novo-Lilly injection-based model and procuring a pill. Pfizer’s drug is at phase two clinical trials, and these suggest it can match Ozempic’s weight loss results.

For now, and assuming no nasty side effects are uncovered, Novo and Lilly have first-mover advantage. “Everyone else is just scrambling to keep up,” Emily Field, head of European pharmaceutical equity research at Barclays, told CNBC recently. “Demand has outpaced even their most bullish assumptions of what they’re able to supply.”

Some analysts worry that the market is getting a bit too bullish on Novo, at 35 times forward earnings, and Lilly at 50 times. Novo undertook a share split last week that cooled things off a bit.

Others reckon there’s more to come. Field calls it “a once-in-a-generation type of story”, particularly as obesity is such a massive public health problem. Nicolas Domont, a fund manager at Optigestion, told Bloomberg that the market is growing more than twice as fast as the industry.

“[There are] only a few things in Europe that are appealing and among them is Novo Nordisk,” he said.

That may be enough to calm nerves on the rollercoaster in Denmark. Meanwhile, Novo Nordisk is trying to make sure the benefits are spread beyond its staff and shareholders. Last week its holding company said it would invest about 2 billion kroner ($443 million) in a new energy transition fund. The golden egg in Denmark’s basket just got bigger still.