Soaring demand for blockbuster weight loss drugs could result in two pharmaceutical companies becoming the first health care companies to reach a market capitalization of over $1 trillion.
Norway’s Novo Nordisk and US-based Eli Lilly are inching their way closer to the benchmark that so far only a handful of companies have been able to reach. As of today, Novo Nordisk’s market cap stands at $508 billion, while Eli Lilly’s sits higher at $623 billion.
Only six companies in the world currently have a market cap over $1 trillion, including Apple at $2.69 trillion and Microsoft at $2.8 trillion. The other companies in this exclusive club are Saudi Aramco, Alphabet, Amazon and Nvidia.
“Perhaps in the future we’ll be talking about Eli Lilly and Novo Nordisk as the world’s first trillion-dollar health care companies,” said Gemma Game, head of health care sector strategy for Norway’s sovereign wealth fund, at a press conference on Tuesday (Jan. 30).
She added that only 1% of the billion people living with obesity have been treated so far and that these new weight loss drugs are early on in their trajectory.
Both Novo Nordisk and Eli Lilly saw their stock price climb by more than 50% in 2023. This is explosive growth is primarily due to interest in the companies’ new class of weight loss known as glp-1 agonists. These drugs, originally approved by the FDA for treating diabetes, have been shown to help users lose up to 26% of their weight in one year.
Novo Nordisk, the maker of Ozempic and Wegovy, reported on Wednesday (Jan. 31) that its sales in 2023 jumped 31% to 232.3 billion Danish kroner ($33.8 billion) compared with 177 billion Danish kroner ($25 billion) in 2022.
The US alone, where over 40% of the adult population is obese, accounted for 45% of these sales. Novo Nordisk has continued to struggle to keep up with demand and as of January is still restricting starter doses of Wegovy. The company projects that its sales will increase by up to 26% in 2024.
Eli Lilly, which launched its weight loss drug Zepbound in December, will report its fourth quarter results on Feb. 6.