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Novo Nordisk: A company that is bigger than its country’s GDP


AI has taken the world by storm, and AI companies like OpenAI, the owner of the popular ChatGPT, attract high market valuation. A lesser-known innovation is also attracting investors, and the companies that offer the innovative products have soared in market valuation.

The innovation is the weight-loss drugs. with two companies, Novo Nordisk and Eli Lilly, are leading manufacturers, which have their drugs approved in the US and the UK. The recent market value of Novo Nordisk is US431 billion, as compared to the GDP of Denmark in 2022 of US$395 billion. At this market value, the company is the 15th most valuable company in the world and the most valuable company in Europe.  Its counterpart, Eli Lilly is worth US$525 billion, a company based in the US, a country of GDP size of more than US25 trillion. Both companies are established pharmaceutical firms..

Novo Nordisk is a unique company in a country of Denmark, which has a  population of only 5.9 million.

Ownership structure of Novo Nordisk

Novo Nordisk’s total share capital of DKK451,000,000 is divided into an A share capital of nominally DKK107,48,200 and a B share capital of nominally DKK342,512,800 (1DKK is 0.14 US$).

The company’s A shares are not listed and are held by Novo Holdings A/S, a Danish public limited liability company, which is wholly-owned by the Novo Nordisk Foundation.

The Foundation has a  dual objective; (1) to provide a stable basis for the commercial and research activities conducted by the companies within the Novo Group (of which Novo Nordisk is the largest) and (2) to support the scientific and humanitarian purposes.

Novo Nordisk’s history

Novo Nordisk’s history spans back to the 1920s, when the company began as two separate  diabetes-focused entities: Nordisk Insulinlaboratorium and Novo Therapeutisk Laboratorium.

Nordisk Insulinlabratorium was founded in 1923, by Danish couple August and Marie Krogh. August Krogh was a  professor at the University of Copenhagen and has been invited to the US by researchers at Yale University of the US  to lecture on his medical research, after receiving the Nobel Prize for physiology in 1920.

Throughout their tour of the US, August and Marie Krogh came across many reports of people with diabetes being treated with insulin. Insulin was a  hormone discovered in 1921 by two Canadian researchers, Banting and Best. Marie, as a doctor, was interested in the treatment as she herself had Type 2 diabetes.

Returning from their trip in the US with permission to produce insulin in the Nordic countries, August and Marie Krogh along with Dr Hans Christian Hagedorn, founded Nordisk Insulinlaboratorium. The pharmacist August Kongsted, owner of Leo Pharmaceuticals, provided the financial support that made it possible to establish the company.

In the same year as it was founded, the company produced the first insulin product in Scandinavia; Insulin Leo. The name was not a coincidence. In return for financial  backing, August Kongsted asked for Nordisk’s first product to be named after his company,. The company hired Herald Pedersen to build the machines for insulin production.

Herald’s brother, Thorvald Pedersen, was also hired by Nordisk to analyse the chemical processes involved in insulin production. However, the brothers did not work at Nordisk for very long. They decided to manufacture insulin themselves, succeeding by producing a stable liquid insulin product that they named  insulin novo. The brothers felt that they could not  cope with the marketing themselves . They contacted their former employer to discuss a deal. But Krogh and Hagedorn turned the offer down. The brothers decide to do it alone. Novo Therapeutisk was formed on February 16th, 1925.

Nordisk kept progressing

In 1926, the company established the Nordisk Insulin Foundation, which aimed to support the physiological and endocrinological research and people with diabetes in Scandinavia.

Nordisk also founded the Steno Memorial Hospital  in 1932. In 1946, Nordisk developed neutral insulin with prolonged action, with a brand name of isophane insulin (Neutral Protamine Hagedorn, NPH).

Novo was charting its own path

While Nordisk was building its portfolio of insulin products, the Pedersen brothers began to build up their company, Novo Therapeutisk Laboratorium. The year the company was established n 1925, they managed to market two products, Insulin Novo and the Novo Syringe. Novo then succeeded to launch its first product manufactured through fermentation, which was called Penicillin Novo.

In 1938, Novo founded the Hvidovre Diabetes Sanatorium, after buying the Hvidovre stately home (which began as the home of Denmark’s King Hans). The 1950’s signified a good year for Novo. In 1951, Novo established the Novo Foundation, which a non-for-profit organization that aims to support scientific. social and humanitarian causes  and also has the objective to provide the best protection for the company. In 1953, Novo launched a long-acting insulin-zinc suspension called Lente. For a period of time, the Lente products covered up to third  of the world’s insulin consumption. In 1973, Novo introduced Monocomponent  (MC) insulin. This was a  step for Novo because it was the purest insulin available at the time.

In the 1970s, Novo; s shares were listed on the Copenhagen Stock Exchange, followed by a listing on the New York Stock Exchange, the first Scandinavian company to achieve that feat.

By the 1980s, Novo launched Human Monocomponent insulin. The difference between this and its previously launched Monocomponent insulin is that the new version was the world’s first insulin preparation which is identical to human insulin. The extraction process this time was from the pancreases of pigs  and then converted to human insulin.

The merger between Novo and Nordisk

As the two pharmaceutical companies operated within a few kilometers of each other, pursuing the same markets, researchers and scientific personnel, rumours began to start in the 1980s about a possible merger.

It was in the late 1980s, specifically in 1989, when Novo and Nordisk officially merged.  First, the Nordisk Insulinlaboratorium, the Nordisk Insulin Foundation and the Novo Foundation merged to become the Novo Nordisk Foundation. The aim of this merger was to provide a stable basis for the Novo Group Companies’ operations and to also support scientific causes. Then, Novo Group joined the merger and the company’s well-known of today, Novo Nordisk, was established. As  a result, Novo Nordisk became the world’s leading producer of insulin. In the same year, the merged company marketed the world’s first prefilled disposable insulin syringe, NovoLet.

Today, Novo Nordisk in involved in core areas, such as diabetes care, haemostasis management, growth hormone therapy, and hormone replacement therapy.

Novo Nordisk’s weight-loss drugs are new growth areas 

According to Matthew Lynn of the London Telegraph, writing on October 10th, 2023, weight-loss drugs will transform our economy as well as our waistlines. The weight-loss drugs will transform our lives as comparable to AI and it is a significant breakthrough. It will replace hundreds of millions of jobs. It will revolutionize the way we work and it will turn every major industry upside down.

There has been a lot of news over the past year and months about the way that AI will transform the economy. And yet there is another innovation with the potential for far greater impact, that is weight-loss drugs.

From flying, to snacking, to healthcare and insurance, the new generation of pills and injections to reduce Type 2 diabetes and obesity may well turn out to be the genuinely transformative innovation of this decade, and in ways the capital markets have only started to reckon with.

Semaglutide, the medication sold under the brand name Wegovy, by Novo Nordisk, is arguably one of the most successful drugs in a generation, if we exclude the relatively short-lived success of the Covid 19 vaccines. This has quadrupled the share prices of Novo Nordisk that has allowed Novo Nordisk to become the most valuable company in Europe. Its success also contributed to a strong GDP growth of Denmark.

The impact of weight-loss drugs could extend far wider than Novo Nordisk. In many European countries, such as the UK, a quarter of the population are classified as obese, while another 37 per cent are overweight. In the US, more than 40 per cent of the population is classified as obese, and 11 per cent as “severely obese” (defined as more than seven stones overweight-1 stone equals 6.35 kg). In Malaysia, about 20 per cent of the population are considered obese.

Obesity is  a major problem right across the world, and one that comes with huge costs. Governments have tried to tackle it with public health campaigns, food reformulation, sugar taxes and other regulations.  None of these measures has really made much difference. Drugs could have a  genuine impact. That will be hugely beneficial for individual health, and the economy in ways that we have only just started to grasp. Take flying, for example. A report by the broker Jeffries estimated that the US airline, United Airlines alone could save US80 million a year if the average passenger  weight fell by 4.5 kg; the increasing size of passengers has been a growing problem for all the main airlines.

Thus, the economics of the airline industry would be transformed  by a general reduction of everyone’s size .

Clothes retailers may get a  boast as well; in the short term, everyone will refresh their wardrobe with shirts and dresses that are a couple of size smaller. In the long run, they will spend less on fabrics as the volume required falls.

Food manufacturers are impacted   

Of course, not everyone  will benefit. Recently, the food manufacturer, Kellog’s, spun out its snacking unit, which includes brand such as Pringle chips, into a new company called Kellanova. It share prices fell sharply after listing.

It might be that investors are growing nervous abut the market for high-salt, high-fat snacks in a world where medication is suppressing our appetite.

But the biggest impact will be on healthcare. Obesity is one of the major causes  of a wide  range of medical problems, with comorbidities including high blood pressure, Type 2 diabetes and heart diseases.

We can expect the cost of insurance to fall significantly  as people get healthier. The public finances may well end up in a far better shape, since the burden on medical systems will be reduced. Even, the pension system needs to be reformed to account for greater longevity.

Semaglutide can only be prescribed as a part of a specialist weight management service  for a maximum of two years, according to current Nice guidelines, casting into doubt its longer-term impact. There may be also side effects to worry about. But it looks like a revolutionary medicine, that is the most effective treatment for obesity to date.

The market for weight-loss drugs is huge, worth an estimated US$100 billion annually, that all the major pharmaceutical companies are working on bringing their own products to the market. So high is the current demand for semaglutide that manufacturers are having to restrict supplies. The incentive for Novo Nordisk and other firms to create a range of better products is huge.

News reports noted that F&B companies are closely monitoring the impact of weight-loss drugs on sales of their products. In fact, Walmart, the largest food retailer in the US reported that people who picked up a prescription for weight loss medicines at its pharmacies are spending less on foods with high calories.

Wegovy, manufactured by Novo Nordisk, is already available in the US and the UK. Another appetite-suppressing  drug, Ozempic, is rumoured to be widely used in Hollywood for weight-loss, although it is designed to help people with diabetes manage the condition

This new breed of weight-loss drugs have been hailed as “miracle drugs” thanks to their efficacy in helping weight loss.

F&B companies would be required to reformulate their products and place more focus on zero-sugar drinks and portion control packages amid changing preferences among consumers.  

Novo Nordisk and Eli Lilly control the weight-loss drugs market with brands such as Ozempic, Wegovy and Munjaro. Othe drug companies are also racing to develop weight-loss drugs, though they may not be available soon. These weight-loss drugs are also being investigated as a treatment for dementia and addiction.

These developments would provide positive impact to Novo Nordik, which started about 100 years ago in the small town of Bagsvaerd in Denmark. Many small countries, such as Malaysia, could learn from Novo Nordisk in its achievement to become a world leading company by initially focusing on specific treatment of diabetes. 


  1. Yahoo Finance
  2. Matthew Lynn. Weight-loss drugs will transform our economy as well as our waistlines. The Telegraph, October 10th, 2023.
  3. Hannah Blake. Pharmaphorum.