Could Novo, Lilly become first trillion-dollar healthcare companies?
By every measure, weight loss drugs have quickly and dramatically transformed Novo Nordisk.
Fueled by the massive uptake of its GLP-1 agonists Ozempic and Wegovy in the last few years, Novo overtook luxury retailer LVMH as the most valuable company in Europe in September — a position maintained with a market cap of more than $500 billion, which is greater than the GDP of Novo’s home country, Denmark.
Novo’s growth has been so impactful in Denmark that last August, the country’s government lifted its economic growth forecast from 0.6% to 1.2%.
And some Wall Street analysts now predict that GLP-1s will become the best-selling class of drugs in history.
Eli Lilly, whose rival GLP-1 Zepbound hit the scene in December, is on its own upswing. With a market cap at about $612 billion, Lilly is already the most valuable pharma company in the world and is expected to rake in Zepbound sales of $2.2 billion this year alone.
By the numbers
$33.7 billion
>$500 billion
The hiccups involved in the drugs’ skyrocketing popularity — from supply chain challenges to safety concerns and the market’s lack of an oral formulation — are not derailing this growth. In fact, sales are just starting to ramp up.
Earlier this week, Gemma Game, head of healthcare sector strategy at Norges Bank Investment Management, which owns a stake in both Novo and Lilly, said in a press conference that “fewer than a fraction of 1%” of patients living with obesity worldwide have been treated with weight loss drugs, and that the drugs’ impact could stretch much further.
By the numbers
40 million
4 billion
“The story is far from over,” Game said. “Obesity is linked to around 200 different diseases and I’m looking forward to data on whether GLP-1 agonists can be effective treatments for chronic kidney disease, obstructive sleep apnea, Alzheimer’s disease, and even test whether they extend human life spans.”
Game went on to speculate that perhaps in the future, “we’ll be talking about Eli Lilly and Novo Nordisk as the world’s first trillion-dollar healthcare companies.”
Just six companies today have a market cap over $1 trillion: Apple, Amazon, Microsoft, Saudi Aramco, Alphabet and Nvidia.
Although GLP-1s dominate the weight loss market now, next-generation options are already in development. Biohaven, for example, is investigating an anti-myostatin drug it said could have an edge over GLP-1 agonists by not only helping patients lose fat, but preserve muscle mass.
Boston-based Versanis Bio, which was acquired by Lilly last year, is on the same track with a phase 2b obesity drug that blocks myostatin signaling.
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