Novo Nordisk Stock Rises on China Approval of Wegovy and U.S. Expansion
U.S. Expansion and Chinese Approval Boost Novo Nordisk
Novo Nordisk saw a rise in its stock price following the approval of its weight loss drug Wegovy in China and the announcement of a $4.1 billion investment to expand its U.S. production capacity.
The new production facility will be built in North Carolina and is part of an $11 billion global expansion plan.
Novo Nordisk, headquartered in Denmark but trading on the New York Stock Exchange under the NVO ticker, experienced a 2% increase in its stock price, reaching $145 per share overnight.
The Tesla of Pharma
Novo Nordisk revolutionized the pharmaceutical industry with its development of Glucagon-Like Peptide 1 (GLP-1) agonists, typically administered via injection. Semaglutide, one of its key products, was first approved for diabetes treatment in 2017 under the brand name Ozempic and later for weight loss in 2021 as Wegovy.
These drugs have not only transformed Novo Nordisk, located in the small Danish town of Kalundborg, 60 miles west of Copenhagen, but have also significantly impacted the weight loss industry. Former market leader WW International (NASDAQ), previously known as Weight Watchers, has now become a penny stock.
Back when Ozempic was first approved, Novo Nordisk’s stock was trading at around $26 per share. Today, it has become Europe’s most valuable company by market capitalization, surpassing the Netherlands’ ASML (NASDAQ), a leading semiconductor production equipment manufacturer. Novo is also 20 times more valuable than the next largest Danish company.
Although Novo Nordisk is currently the only company in the U.S. with FDA-approved semaglutide products, it faces competition from several similar drugs in the market. The most prominent competitor is Eli Lilly (NYSE), which markets its GLP-1 drugs, tirzepatide, under the brand names Zepbound and Mounjaro.
The Expanding GLP-1 Market
The GLP-1 market was valued at $57 million in 2018 and surged to $5.7 billion by 2022. Projections indicate that it could grow to a $133 billion global market by 2030.
Future Prospects for NVO Stock
Novo Nordisk and Eli Lilly are anticipated to dominate 80% of the GLP-1 market throughout this decade. Novo’s patent on Ozempic remains in effect until 2032, ensuring its leading position in the market for years to come.