Norway's giant wealth fund touts possibility of Novo Nordisk, Eli Lilly joining the trillion-dollar club

A pharmacist shows containers of Ozempic, a semaglutide injection drug used for treating sort 2 diabetes made by Novo Nordisk, at Rock Canyon Pharmacy in Provo, Utah, U.S. March 29, 2023. 

George Frey | Reuters

Norway’s giant wealth fund, the world’s largest, touted the possibility that Danish drugmaker Novo Nordisk and U.S. rival Eli Lilly could possibly be heading in the right direction to change into the first healthcare members of the trillion-dollar club.

The feedback come as the two corporations are seen as the main beneficiaries of skyrocketing demand for diabetes and weight reduction medicine.

Novo Nordisk, Europe’s largest agency by market capitalization, on Wednesday reported stronger-than-anticipated 2023 earnings, as gross sales of its vastly well-liked drug Wegovy continued to soar. The agency’s market valuation surpassed $500 billion on the information.

The largest pharmaceutical firm in the world by market worth, Eli Lilly at the moment stands at roughly $612 billion.

Gemma Game, head of well being care sector technique at Norges Bank Investment Management (NBIM), said Tuesday that the launch of secure and efficient weight reduction medicine final yr had helped to make Novo Nordisk and Eli Lilly family names.

The model names of particular person medicines, akin to Novo Nordisk’s Ozempic and Wegovy, and Eli Lilly’s Zepbound, have change into acquainted to many.

“The story is much from over,” Game stated. “For the billion [of] folks residing with weight problems round the world at the moment, that is actually thrilling. Fewer than a fraction of 1% have been handled to this point. So, we’re early on in the launch trajectory.”

NBIM, the world’s biggest single stock market investor, holds a 2.5% stake in Novo Nordisk and a 0.98% stake in Eli Lilly, in line with LSEG knowledge.

Eli Lilly and Company, Pharmaceutical firm headquarters in Alcobendas, Madrid, Spain.

Cristina Arias | Cover | Getty Images

Obesity, which has important well being implications, is linked to round 200 completely different medical situations.

NBIM’s Game stated she can be intently monitoring knowledge on whether or not the anti-obesity medicine generally known as GLP-1 agonists may additionally successfully deal with persistent kidney illness, obstructive sleep apnea and Alzheimer’s illness.

“We’ve simply heard about the ‘Magnificent Seven,'” Game stated throughout a information convention, referring to a gaggle of mega-cap U.S. tech shares. “Perhaps in the future we’ll be speaking about Eli Lilly and Novo Nordisk as the world’s first trillion-dollar well being care corporations.”

U.S. tech giants together with Microsoft, Apple and Amazon are all valued at over $1 trillion by market capitalization, whereas Meta‘s market worth recently surpassed the milestone for the first time since 2021.

Barclays said final yr that it expects the world weight reduction drug market to develop to about $100 billion by the finish of the decade.

“If something, we really feel extra assured about these forecasts,” Emily Field, head of European pharma fairness analysis at Barclays, advised CNBC’s “Worldwide Exchange” on Jan. 8.

“What Novo was capable of firmly set up final summer season, and we noticed extra knowledge in the fall, was that not solely do you drop some pounds, however it might probably have a serious profit in your cardiovascular well being,” she added.

“And this yr, we wish to see updates on all these different areas of the place reducing weight can result in different advantages, akin to in kidney illness and likewise doubtlessly liver illness.”

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