LONDON (CNN) — The impressive success of the weight-loss drug in the United States has led to a drop in interest rates in Denmark, one of its biggest manufacturers, according to that country’s biggest bank.
Sales of Vegovy — which, according to clinical trials, can help people lose 15% of body weight in less than 16 months — have skyrocketed in recent months. Its maker Novo Nordisk posted profits of around 49 billion Danish kroner ($7 billion) in the first six months of this year, up 32% from the same period in 2022.
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Novo Nordisk also produces Ozempic, a drug developed to treat type 2 diabetes, but it contains the same active substance as Vegovi. Some doctors prescribe Ozempic to patients to help them lose weight.
Rising sales of both drugs have allowed US dollars to flow into Denmark’s economy, driving up the value of the Danish krone, Danske Bank director Jens Nervig Pedersen wrote in a note last week.
Denmark’s central bank reacted by keeping interest rates below those set by the European Central Bank, Pedersen said. He told CNN that this prevented foreigners from buying more kronor and reduced the value of the currency. The Danish central bank did this because it wanted to keep the krona stable against the euro in order to achieve the same level of inflation in the 20 countries that use the euro.
An Ozempic injection pen. (Credit: Jaap Arians/NurPhoto/Getty Images)
“It’s extraordinary that one company is driving such a large part of Denmark’s growth and trade surplus. We’ve had other big companies over the years, but none have had such a positive impact on the economy,” Pedersen told CNN. “
As a result, some home owners in Denmark are paying lower rates on their mortgages than their counterparts in Europe, he said.
Andrew Kenningham, chief European economist at Capital Economics, told CNN that Denmark “has done better than almost any other European economy” since the pandemic.
This, he said, is “largely” due to the success of its pharmaceutical industry, whose exports have quadrupled since 2019.
Novo Nordisk shares are up 34% since the start of 2023, taking its market capitalization to 2.2 trillion Danish kroner ($322 billion).
Shares soared earlier this month after Novo Nordisk published the results of a five-year trial of Vegovy’s effects on heart disease. This medicine has been shown to reduce the risk of heart attack, stroke or heart-related death by up to 20%.
The drugmaker is now Europe’s third most valuable company, overtaking pharmaceutical giants Roche and AstraZeneca (AZN).
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The good times are not likely to end anytime soon. Novo Nordisk now expects its profit to soar 37% this year, well above the 19% growth it estimated in February.
Increased demand for its slimming drugs has led to worldwide shortages, resulting in problems for patients with diabetes who rely on Ozempic to control their disease.
According to a July survey by the Kaiser Family Foundation, nearly half of American adults said they would be interested in taking a weight-loss drug that they knew was safe and effective.