The single company propping up an entire economy

afr.com:

London | If you suffer from obesity, Danish pharmaceutical giant Novo Nordisk has two talk-of-the-town drugs, Ozempic and Wegovy, that might be able to help you slim down. But for Denmark as a whole, the reverse is true: these miracle medicines are actually fattening up an otherwise shrinking economy.

Denmark’s GDP increased 1.7 per cent in the first half of this year, outpacing the anaemic 0.2 per cent in the 20-country eurozone. But if you strip out the contribution of Novo Nordisk, which sold $4 billion in weight loss drugs alone in the first half of the year, the Danish economy would have shrunk 0.3 per cent.

Copenhagen’s Nyhavn Harbour. Denmark’s GDP increased 1.7 per cent in the first half of this year, largely because of Novo Nordisk. Bloomberg

There’s almost nothing about this story that doesn’t raise an eyebrow. Novo Nordisk, which hails from a country of about 5.9 million people – only just bigger than Queensland – this month briefly had the largest market cap in Europe, knocking off luxury goods titan LVMH. It is bigger than at least the next 10 Danish companies combined.

The 100-year-old company has notched up a 42 per cent share price increase since the start of this year, most of which came in a wild few days in early August after Wegovy was shown to help prevent cardiac problems as well. Sales are up 29 per cent and operating profit is up 32 per cent.

The company celebrated the boom times by putting on a massive jamboree for its 10,000 staff on a field in Roskilde, the site of one of Europe’s largest music festivals.

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