The Danish company Novo Nordisk, which makes weight-loss drugs as well as drugs for type 2 diabetes, has made billions of dollars in revenue and increased its market value by more than a third this year, a value greater than even the country’s gross domestic product.
The increase in the market value of the manufacturer of “Ozempic” and “Wegovy” drugs, which are in great demand in the United States, led to lower interest rates in Denmark, unlike European countries and the world, according to reports of bankers and economists.
A newspaper report explains,Wall Street JournalHow the market capitalization of Denmark’s largest company rose by more than a third, to about $419 billion, which is greater than the country’s GDP of about $406 billion.
Although the measures of the market value of a company and the country’s GDP are different, the comparison between them gives a clearer picture of the success of the “Novo Nordisk” company in positively affecting the Danish economy in general.
The American need to serve the Danish economy
The Wall Street Journal report focuses on the American society’s need for weight-loss drugs, and how it directly or indirectly affected the company’s revenues and its home country, Denmark.
And the company’s branch in the United States reveals the development of its sales of anti-obesity drugs and injections, in a way that confirms what was stated in the American newspaper report.
And according to The data it published on its official websiteNovo Nordisk’s sales increased by 29% in Danish kroner and by 30% in constant exchange rates, to $15.6 billion in the first six months of 2023.
In its financial report for the period from January 1 to June 30, 2023, the company revealed an increase in its operating profit by 30% in Danish krone and by 32% at constant exchange rates to $7.1 billion.
A fixed exchange rate is a system of exchange rates, in which the exchange rate of a currency is determined fixedly, against the exchange rate of another currency, or against a basket of currencies, or against gold.
According to its official website, the company’s sales in North America increased by 45% in Danish krone, while its international sales increased by 14%.
and elevation the sales Diabetics and obesity increased by 36% to $14.4 billion, mainly driven by sales growth of diabetes injections by 49% and anti-obesity injections by 158% or $2.6 billion.
Positive effects on the economy of Denmark
The sales force of Novo Nordisk’s US branch to “Ozmbik” and “Vegovy” has increased conversions of dollars into krona in large quantities, raising the value of the kroner relative to the euro, said Danske Jens Bank managing director Nerveg Pedersen.
And this banking official added in an interview with the newspaper: “Since the exports of the pharmaceutical industry have grown a lot, it creates a large inflow of currency into the Danish economy.”
On this basis, officials at the Central Bank of Denmark decided to keep interest rates lower than the European Central Bank.
Novo Nordisk is extending curbs on US supplies of its hot weight-loss drug Wegovy as it struggles to keep up with soaring demand. The news came as the Danish drugmaker raised its full-year profit and sales forecasts for a second time this year pic.twitter.com/ZwtcCXO3Ux
— Reuters (@Reuters) August 10, 2023
Therefore, economists saw Novo Nordisk’s success with drugs used for weight loss and diabetes as “an overall boon for the Danish economy”, which, in their view, would benefit from more jobs provided by the growth of the company expanding domestically.
They said lower interest rates would ultimately benefit homebuyers, who could secure somewhat lower mortgage rates than in the rest of Europe and even the United States.
“This is good for the Danish economy, they get a lot of export earnings,” said Gian Maria Milesi Ferretti, an economist and senior fellow at the Brookings Institution.
Novo Nordisk is now the second most valuable public company in Europe after luxury brand LVMH Moët Hennessy Louis Vuitton.
Analysts estimate the company’s weight-loss drug sales will be $6.1 billion this year and reach nearly $15 billion annually in 2027, according to data provider FactSet.
Data from the company indicates that US health service providers were writing about 60,000 new weekly prescriptions for the drug as of April.NBC NewsAmerican.
The company raised its forecast for 2023, when its sales are set to grow by 27 to 33% and operating profit growth by 31% to 37%, on constant exchange rates.CNBC“.
2023-08-19 12:08:06
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