IS NOVO NORDISK TOO BIG TO FAIL?

A weekly jab. That's all it has taken to shrink millions of waistlines across the developed world and create one of Europe's most valuable companies.

- Ryan

In just five years, Denmark's Novo Nordisk has propelled itself from a niche pharmaceutical group best known for commercializing insulin 100 years ago to a company that has the power to shape its home country's monetary policy and create one of the world's wealthiest charitable organizations.

Such influence, though, brings inevitable scrutiny, not to mention precarity. Rising competition; pressure from lawmakers in its biggest market, the U.S.; and disappointing trials have exposed dents in the company's armor. However, to identify its biggest risk, Novo's backers should take lessons from the past.

DENMARK'S "NOKIA RISK"

Novo Nordisk has experienced a meteoric rise on the back of surging demand for Ozempic and Wegovy, brand-name versions of its GLP-1 medication semaglutide, which have become world-famous tools in the fight against obesity. At a valuation of $380 billion as of mid-January, the pharmaceutical company was Europe's largest by market capitalization and was briefly worth more than the entire Danish economy.

The Novo Nordisk Foundation, a charitable organization that is the majority owner of the pharmaceutical company, has become a major philanthropic force as a result. The company responsible for the foundation's endowment reported in 2023 it has €149 billion ($156 billion) in assets under management, dwarfing the $75.2 billion endowment of the Gates Foundation. It's an astounding legacy for what a decade ago was a middling pharmaceutical group.

Trouble, though, is never far away.

Cautious analysts have flagged the "Nokia risk" as a potential danger for the Danish economy should it become too reliant on a single company, in this case Novo Nordisk.