Elon Musk once used a weight loss drug to look 'fit, ripped and healthy' — now the company behind it is more valuable than the entire economy of Denmark. Here's what happened
An announcement by Novo Nordisk in August drew the attention of Wall Street. Now, the drug manufacturer is worth more than the entire GDP of its home country Denmark.
Novo Nordisk, the company behind popular weight-loss drug Wegovy, sent out a press release with some of the results of its latest study that showed the drug may have additional health benefits.
The news sent the company’s stock soaring.
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Wegovy, the brand name for an injectable form of the drug semaglutide, was approved by the Food and Drug Administration (FDA) in 2021 as a treatment for chronic weight management in adults with obesity or those who are overweight with at least one weight-related condition, such as high blood pressure, Type 2 diabetes or high cholesterol.
The drug also seemingly got a thumbs up from the world’s wealthiest man, Elon Musk, last year after the SpaceX and Tesla CEO admitted to using it when someone asked his secret to looking "fit, ripped and healthy."
Novo Nordisk now claims the drug’s benefits could stretch beyond weight loss and cut the risk of serious cardiovascular events, such as heart attacks and strokes. The news swiftly added billions of dollars to the market value of the drug manufacturer. Here’s a closer look at what happened.
New research
On Aug. 8, Novo Nordisk announced that new research shows weekly injections of Wegovy reduced the risk of major adverse cardiovascular events by 20% compared to a placebo group. The study involved over 17,000 participants aged 45 and up who were overweight or obese with established cardiovascular disease but no history of diabetes. It’s important to note, however, this data was released by the drugmaker itself and the full study has yet to be released in a peer-reviewed publication.
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But a separate study published within a week of Novo Nordisk’s announcement appears to complement the drugmaker’s claims. Research out of the University of California, Irvine (UCI), published in the journal Cardiovascular Drugs and Therapy on Aug. 14, indicates the use of Wegovy could result in 43 million fewer people with obesity in the U.S. and prevent up to 1.5 million cardiovascular events over a 10-year period. Results were based on an analysis of Novo Nordisk’s STEP 1 semaglutide trial in 2021. Notably, the lead author of the UCI study receives funding from Novo Nordisk.
Meanwhile, Wall Street seems optimistic about the outlook for this class of drugs.
Novo Nordisk stock
Novo Nordisk stock jumped 18% on Aug. 8, the day the company made its announcement, and its market capitalization is currently around $425 billion. By comparison, Denmark’s GDP in 2022 was $395 billion.
Overall, Novo Nordisk’s market value has more than doubled since Wegovy received FDA approval in June 2021.
Wegovy is thus far the only semaglutide medication approved for weight management. The much-discussed Ozempic, also manufactured by Novo Nordisk, is approved only for diabetes treatment, though some celebrities have claimed in recent months to use it for weight loss.
Meanwhile, a lawsuit has been filed against Novo Nordisk and another drugmaker, Eli Lilly and Company, which produces its own diabetes drug, Mounjaro, known to be used off-label for weight loss. The suit claims the drugmakers failed to inform patients that the drugs could potentially cause gastrointestinal events, including stomach paralysis.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
