About The Company
Novo Nordisk (NVO) is a Denmark based multinational pharmaceutical company that specializes in diabetes care medications and devices.
The company realized huge gains when it developed “Semaglutide”, a drug to treat diabetes. This particular drug was branded as “Ozempic” for diabetes and also “Wegovy” for obesity. Ozempic was always expected to do well but the matching success of Wegovy sent Novo Nordisk through the roof, to the tune of 44.21% YTD thus far. To go further, shares have climbed more than 327% over the last 5 years which reflects the company’s ability to identify health concerns within the global population.
Semaglutide’s Effectiveness
If there was ever a year when people abandoned diets and gym memberships for a weight loss pill, 2023 was most certainly that year. And yes, we know, the pill statement is not accurate, both Ozempic and Wegovy are injectable medications but that hasn’t stopped their growth in developed nations.
According to News Medical, “over 75% of the Wegovy cohort lost 5% or more of their body weight at 2 years, confirming its clinical efficacy. These odds were fivefold greater compared to placebo and emphasize the need to treat obesity as a chronic condition. Waist circumference and blood lipid levels also dropped on Wegovy”. If that sounded like an ad with an “ask your doctor about Wegovy” at the end, we can assure you it wasn’t, those are just the facts. Although Novo Nordisk has developed numerous medications other than Semaglutide, its ascent to a $450 billion dollar company was certainly due to this holy grail of weight loss.
To go further on the Wegovy clinical trials, among obese adults who were encouraged to eat appropriately and exercise, 2 years of treatment led to an average of more than 15% weight loss. It’s safe to say that Novo Nordisk made a huge scientific breakthrough in this vertical, but what about future demand?
Can Novo Nordisk Generate Demand?
Well the company isn’t hurting for new customers, 2023 is guaranteed to be a record year for both revenue and profits for NVO. In addition, a KFF Poll found that 45% of adults said they would generally be interested in taking a safe and effective prescription weight loss drug. Furthermore, that figure includes 59% who are already trying to lose weight and 51% who are trying to lose fewer than 10 pounds. To put that into perspective, Humira, the best selling prescription drug of all time, is administered to just 300k Americans each year. Wegovy’s peak, should those polls hold true, should surpass that of Humira within the next 3-5 years.
Think about it, is taking a weight loss injection easier than a diet or the attending the gym? Or rather, is going on a diet or attending the gym easier while taking a weight loss injection? Novo Nordisk wins in either scenario; and since 70% of adults polled have already heard about the drug, it’s not exactly a hard sell at this time. We’ll see what the future holds for this trailblazing pharmaceutical company.
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