Biotech
Wednesday, January 31st, 2024 4:28 pm EDT
Key Points
- Norway’s sovereign wealth fund, the world’s largest, suggests that Danish drugmaker Novo Nordisk and U.S. rival Eli Lilly could become the first healthcare companies to reach the trillion-dollar valuation club, driven by surging demand for diabetes and weight loss drugs.
- Novo Nordisk, Europe’s largest firm by market capitalization, reported stronger-than-anticipated 2023 earnings, particularly from its popular drug Wegovy, leading to a market valuation exceeding $500 billion. Eli Lilly, the largest pharmaceutical company globally by market value, currently stands at approximately $612 billion.
- Gemma Game, Head of Health Care Sector Strategy at Norges Bank Investment Management (NBIM), emphasizes the transformative impact of Novo Nordisk and Eli Lilly’s safe and effective weight loss drugs, making them household names. NBIM, the world’s biggest single stock market investor, holds stakes in both companies, and Game envisions them as potential trillion-dollar healthcare companies in the future, comparable to major U.S. tech stocks. The anticipated growth in the global weight loss drug market to about $100 billion by the end of the decade further supports this outlook.
Norway’s sovereign wealth fund, the largest globally, suggests that Danish drugmaker Novo Nordisk and U.S. rival Eli Lilly could become the first healthcare companies to join the trillion-dollar club. This speculation is fueled by the surging demand for diabetes and weight loss drugs, with Novo Nordisk recently reporting robust 2023 earnings, driven by the success of its popular drug Wegovy, pushing its market valuation beyond $500 billion. Eli Lilly, the world’s largest pharmaceutical company by market value at approximately $612 billion, is also recognized for its contributions to the obesity and weight loss drug market. Gemma Game, Head of Health Care Sector Strategy at Norges Bank Investment Management (NBIM), highlights the potential of Novo Nordisk and Eli Lilly in addressing global obesity, a condition associated with around 200 medical conditions. NBIM, the largest single stock market investor, holds stakes in both companies. Game emphasizes the early stage of the drug launch trajectory, with less than a fraction of 1% of the global population with obesity having been treated so far. She anticipates monitoring data on whether anti-obesity drugs like GLP-1 agonists could effectively treat chronic kidney disease, obstructive sleep apnea, and Alzheimer’s disease. Game envisions Novo Nordisk and Eli Lilly as potential trillion-dollar healthcare companies in the future, akin to mega-cap U.S. tech stocks. Barclays predicts the global weight loss drug market to reach about $100 billion by the end of the decade, expressing confidence in these forecasts. Emily Field, Head of European Pharma Equity Research at Barclays, underscores the positive impact of weight loss on cardiovascular health, anticipating updates on its benefits in areas such as kidney and liver disease. The focus on Novo Nordisk and Eli Lilly’s potential trillion-dollar status reflects the transformative impact of their drugs and ongoing developments in the healthcare sector.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/01/31/norway-wealth-fund-says-novo-eli-lilly-may-join-trillion-dollar-club.html
