Denmark is one of the few countries in Europe with a growing economy, partly thanks to the Ozempic and Wegovy manufacturer Novo Nordisk's major successes.
But after a series of setbacks for the company's weight loss products on the American market, there is now a concern that the company's problems will become a burden for the Danish economy as a whole.
Lost billions
Last week, Novo's market value decreased by almost 100 billion dollars after the company on Tuesday lowered its profit forecast due to increased competition in the USA. The stock plummeted 23 percent and continued to fall in the following days.
The crash directly affected the Danish households' economy. Danes lost 38 billion Danish kronor in ordinary share portfolios just on Tuesday, according to estimates from Sydbank.
There will be shareholders who have lost quite large amounts. It is very likely that we will see that some Danish investors will refrain from buying a new car or booking an expensive vacation, says Mikael Bak, CEO of the Danish shareholders' association, to Bloomberg.
Lower GDP
Novo Nordisk's size also means that the economic damage can spread beyond the stock market. Economists have warned that a prolonged downturn for the pharmaceutical company can pull down the country's exports. This is a concern shared by Denmark's financial supervisory authority, which lowered its export forecast in May after a profit warning from Novo Nordisk.
Since the pharmaceutical company's production is included in Denmark's gross national product, every downward revision of expectations will "almost automatically" affect the country's growth figures, says Las Olsen, chief economist at Danske Bank, Denmark's largest lender.
Lower growth in Novo means lower GDP growth in Denmark, it's that simple, says Las Olsen.
