Musk’s ＂slimming medicine＂ made this European pharmaceutical company ＂rich as an enemy＂

　　With Wegovy, regarded by many as a "miracle drug for losing weight", selling well in the United States, Danish pharmaceutical giant NovoNordisk has become the second largest company in Europe after French luxury goods giant LVMH in one fell swoop, making well-known Danish companies such as Lego and Carlsberg "put to shame".

　　▲ Novo Nordisk "slimming medicine" Wegovy

　　For Denmark, with a population of only 5.8 million, Novo Nordisk has now become a "rich as an enemy" behemoth, and in 2022, Denmark’s annual GDP will not be equal to the market value of this company. The director of the Bank of Denmark admitted that because Novo Nordisk’s export scale was too large, Denmark had to deliberately lower the domestic benchmark interest rate to maintain the exchange rate balance with the euro.

　　The Danish economist Rasmussen wrote an article reminding that although Danish families who have repaid their mortgages are very happy with the policy of low interest rates, it is not a good thing for small countries to rely too much on a certain enterprise. For example, he said that the Finnish economy was highly bound to the fate of Nokia, and Finland’s economic development was seriously dragged down by Nokia after the rise of iPhone.

　　Musk "brings goods"

　　Novo Nordisk’s sales revenue increased greatly.

　　In October 2022, Tesla founder Musk replied to netizens on Twitter, saying that he lost weight crazily within one month and achieved the effect visible to the naked eye, and his secret was to regularly fast food and Wegovy.

　　The "Wegovy" mentioned by Musk is the trade name of the slimming drug "Smegrupeptide" developed by Danish pharmaceutical company Novo Nordisk. In June 2021, the drug was approved for marketing by the US Food and Drug Administration (FDA). In the same year, this drug was approved for the treatment of type 2 diabetes in China mainland market, but so far this drug has not been approved for weight loss indications (that is, it cannot be used as a weight loss drug).

　　The drug is well known to the public because of Musk’s "bringing goods" and the use of it by some European and American rich people in the fields of finance, science and technology to lose weight, which has also caused the sales of Wegovy to soar, and even Ozempic, a sister product of Novo Nordisk (Chinese name "Novo Thai"), is out of stock globally due to its hot sale. Searching for "Wegovy" and "Ozempic" on overseas social platforms, there are a lot of videos to promote their weight loss effect, and the related tags have accumulated hundreds of millions of views.

　　On August 10th, Novo Nordisk reported in its semi-annual report that its sales increased by 30% and its operating profit increased by 32% in the first half of this year at constant exchange rate. Thanks to the market interest in Wegovy, its diabetes and obesity departments performed particularly well. In the North American market, the company’s sales of diet pills increased by 46%.

　　Lars Joergensen, President and CEO of Novo Nordisk, said in a statement: "The sales growth is due to the increasing market demand for diabetes and obesity treatment, and our company serves more patients than ever before. The performance in the first six months has enabled us to improve our expectations for the whole year. "

　　Director of Danish Bank:

　　The hot sale of "slimming medicine" affects the interest rate decision

　　In the booming sales situation, Novo Nordisk’s share price rose by 73% this year, becoming the second largest company in Europe, and its market value is second only to that of French luxury goods giant LVMH.

　　Based on the latest closing price, the market value of Novo Nordisk is about US$ 417.8 billion (about RMB 3.05 trillion). Last year, Denmark’s GDP totaled 398.3 billion US dollars (about 2.9 trillion yuan), which was still less than the market value of a company of Novo Nordisk. Because Novo Nordisk has brought huge export income to Denmark, Denmark even had to lower interest rates and increase foreign exchange reserves to deliberately weaken the competitiveness of its currency.

　　Jens Petersen, director of the Bank of Denmark, said helplessly: "It sounds like a joke to say that the American weight loss craze has affected Denmark’s benchmark interest rate, but in fact it is true."

　　▲ Danish scenery

　　On August 16th, local time, the report issued by the Bank of Denmark said, "We have seen the growing role of the pharmaceutical industry in the Danish economy, which has put pressure on the currency exchange rate and the national policy interest rate, and there is a real connection between them."

　　At present, Denmark’s monetary policy is linked to the euro, so the country’s central bank fine-tunes its monetary policy through money market intervention and interest rate adjustment, so as to keep the exchange rate of Danish krona stable against the euro. Due to the explosive growth of Novo Nordisk’s performance, foreign businessmen rushed to buy Danish krone to buy popular drugs such as Wegovy, and the trend of Danish krone has been very strong compared with the euro.

　　In order to keep the exchange rate balanced, the Danish monetary authorities must deliberately weaken the competitiveness of the krona, so they cut Denmark’s benchmark interest rate to a level lower than the euro zone interest rate. According to the report of the Bank of Denmark, due to the continuous strengthening of pharmaceutical exports, Denmark may be forced to expand the interest rate difference to more than 40 basis points, and at the same time, Denmark will increase foreign exchange reserves such as the euro.

　　Sydbank, another bank, estimates that since the end of 2021, the pharmaceutical industry has increased Denmark’s GDP by nearly 2%. The bank is worried that the "outshine others" of the pharmaceutical industry may cover up the weaknesses of the Danish economy in other fields.

　　Economist:

　　Finland and Nokia are "lessons from the past"

　　Danish economist Sinus Rasmussen wrote that although Novo Nordisk’s success has created employment opportunities and local investment in Denmark, and Denmark’s low interest rate policy has also benefited families who have repaid their mortgages, he still reminds Danes that the lifeline of the national economy should not be tied to one company.

　　Rasmussen said: "For small countries, it is risky to let a domestic company play such a disproportionate role in the economy. Many years ago, Finland’s economy was dominated by telecom giant Nokia. At its peak in 2000, the company’s revenue accounted for 4% of Finland’s GDP, more than one-fifth of its exports and 70% of the national stock value. It played an important role in Finland’s growth from 1995 to 2007. During that time, Finland’s per capita GDP increased by 55%, almost twice the growth rate of the United States. "

　　However, the decline of Nokia also coincides with Finland’s economic stagnation track after the 2008 financial crisis. Some analysts pointed out that because the iPhone launched by Apple brought about tremendous changes in the mobile phone market, the collapse of Nokia in the mobile phone market aggravated Finland’s economic difficulties. Under the influence of austerity policies and the involvement of the euro zone crisis, Finland’s national per capita income continued to decline in the next decade.

　　Red Star journalist Zheng Zhi