Novo Nordisk’s market valuation has increased so rapidly in recent weeks that it has overtaken Elon Musk’s EV giant.
Novo Nordisk On Top
A new weight loss pill being trialed by Olympic maker Novo Nordisk has sent the company’s value soaring. Its market value has now eclipsed that of electric vehicle manufacturer Tesla.
Increases to $610 Billion
On Thursday, shares in the Danish pharmaceutical company jumped over 8%, and its market capitalization hit almost $610 billion.
12th Most Valuable Company
This unprecedented surge has placed Novo Nordisk as the world’s 12th most valuable company, jumping over both Tesla and Visa, thanks to a new drug trial.
A Double-Powered Pill
The trial was of a new weight loss oral drug called amyretin, which is said to be twice as effective as their weight loss pill Wegovy.
Promising Trials
During the trial, participants lost 13% of their body weight in just 12 weeks, compared to similar trials where patients taking Wegovy lost 6% in the same period.
Investor Excitement
While the drug trials for amyretin are still ongoing, the news of its effectiveness so far has sent investors lunging for shares in the company since its value is unlikely to drop if the eventual product lives up to expectations.
A Shift in the Market
Its overtake of Tesla indicates a dramatic shift in market interests since Tesla’s market cap was four times higher than Novo Nordisk’s just two years ago at the end of 2021.
Crazy for Weight Loss Pills
According to Savita Subramanian, a top strategist for Bank of America, the market sentiment is “euphoric” over pharmaceuticals, specifically weight loss drugs, artificial intelligence, and “not much else.”
The Industry Excels
It is a huge boost for the weight loss industry across the board. While Novo shares have increased by 80% in the last 12 months, shares in its main competitor, Eli Lilly, have also gained significant value over the same period.
Not So Promising for Tesla
On the other hand, the same can’t be said for EV manufacturers like Tesla. Demand for EVs has slowed, and Tesla’s shares have risen by less than 1%.
China in the Race
Elon Musk’s company is now also in fierce competition with Chinese manufacturers – China’s BYD overtook Tesla as the world’s largest EV manufacturer in late 2023.
The Next Big Thing
Amyretin is the next in a line of phenomenally popular weight loss medications, known as GLP-1 agonists, from Novo Nordisk.
Ozempic and Wegovy
The two best-known of these products are Ozempic and Wegovy. While both contain the key ingredient semaglutide and both have gained attention as weight loss drugs, there are some differences.
Diabetes and Weight Loss
The FDA has only approved Ozempic as a treatment for Type 2 diabetes. Meanwhile, Wegovy, which has a higher dose of semaglutide, has been approved for prescription as a weight loss treatment.
Pharmaceutical Giant
Over the last few years, Novo Nordisk has cemented itself as a leader in the pharmaceutical industry, creating a new generation of weight loss medications that are helping millions of Americans fight against obesity and diabetes.
Miracle for Denmark
It has also been a miracle worker for its home country of Denmark. The company’s value now exceeds Denmark’s annual output, and it even saved the country’s economy from a recession last year.
LMVH Falls Behind
Last year, it also outperformed luxury brand conglomerate LMVH to become the most valuable listed company in Europe.
Deciding Factor for the Danish Economy
According to Jens Naervig Pedersen, a senior analyst at Danish banking multinational Danske Bank, in 2023, Novo Nordisk was the “difference between whether or not the Danish economy grew.”
Economic Firestarter
“We have this very large successful company that is pushing the economy higher,” Pederson said. “It’s creating jobs, it’s creating investments in new factories, jobs in the construction sector.”
Billions Invested
Novo Nordisk’s runaway success has given them plenty to work with. The company has announced an $8.7 billion investment package to expand its manufacturing capacity.
It also spent $11 billion in February to purchase three new factories.
Biden’s New 401(k) Rule: Employers Frustrated as Retirement Planning Responsibilities Shift
The latest Biden administration rule on 401(k) plans is reshaping how employers manage retirement plans. It’s a complex scenario requiring a fresh understanding of fiduciary duties and provider relationships. This rule aims to protect employees but also imposes new responsibilities on employers. Biden’s New 401(k) Rule: Employers Frustrated as Retirement Planning Responsibilities Shift
Elon Musk: New Immigration Bill ‘Enables Illegals to Vote’
Elon Musk is calling for prosecutions after the text for a new senate bill on immigration was released. Musk accused the new bill of “enabling illegals to vote.” Elon Musk: New Immigration Bill ‘Enables Illegals to Vote’
Colorado Officials Reject Sanctuary City Status, Warn Against ‘Dangerous Game’
With increasing numbers of migrants arriving in Colorado, public officials have rejected any notion of the state becoming a sanctuary for migrants and asylum seekers. Colorado Officials Reject Sanctuary City Status, Warn Against ‘Dangerous Game’
Disney Challenges DeSantis’ “Don’t Say Gay” Rule With a Hefty Lawsuit
Disney is set to appeal its refusal for a lawsuit against Ron DeSantis, who stripped the company of its rights for disagreeing with the Governor’s views on the teaching of sexual orientation in classrooms. Disney Challenges DeSantis’ “Don’t Say Gay” Rule With a Hefty Lawsuit
Trump on the Attack as 21 Million Americans Flock to Obamacare, Biden Pushes Forward
An unprecedented surge in health plan enrollments has reignited former President Donald Trump’s commitment to dismantling the program should he secure the GOP nomination once again. Trump on the Attack as 21 Million Americans Flock to Obamacare, Biden Pushes Forward
The post Weight Loss Wonder Pill Makes Drug Company Richer Than Tesla first appeared on From Frugal to Free.
Featured Image Credit: Shutterstock / SFIO CRACHO.
The content of this article is for informational purposes only and does not constitute or replace professional financial advice.