Novo Nordisk, the Danish Pharmaceutical giant, has supplanted French luxury conglomerate LVMH, the biggest retailer of luxury goods in the world, and owner of brands such as Louis Vuitton and Dior, to take the mantle of the most valuable company in the European Union, according to trading data.
On Friday, the Pharma company’s shares rose 2.14%, which lifted the firm’s market capitalization to around $424.7 billion. Meanwhile, as Novo Nordisk’s shares were surging, LVMH, the biggest listed firm in Europe as of February 2021, saw its shares fall 0.8%, bringing the share price down 14.2% of its all-time high, reached in April. As of Friday’s close, LVMH had a market capitalization of $420.1 billion.
Speaking of the development, Marcel Stotzel from Fidelity European Fund and Fidelity European Trust said in an interview with Reuters, “Novo closing in on LVMH as Europe’s biggest market cap stock is a reflection of Novo’s recent product success while LVMH’s recent trends have been more mixed.”
The Danish pharmaceutical company, which specialized in products addressing diabetes, has seen its shares gain steadily for the last three years, after the launch of its extremely popular obesity drug, Wegovy. The company’s stock surged to never-before seen highs after publishing a study last month which showed that Wegovy reduced the risk of heart attacks and strokes in users by 20%.
Wegovy joins another blockbuster drug in the Novo Nordisk’s drug portfolio, Ozempic. In August, the company increased is annual sales forecast, partly due to the success of Ozempic, which while popular as a diabetes medicine, has also grown popular as an off-label obesity treatment. The company’s shares have tripled in value since 2020, as of September 1st, which has driven the market capitalization of the firm to more than the entire GDP of Denmark.
Meanwhile, the share price of LVMH has fallen in recent months, as domestic demand for luxury goods has fallen due to a persistent inflation throughout the EU and rapidly rising interest rates. In addition, the weakening of the economy in China, and the growing crisis in its property sector have weakened demand in a key market for LVMH’s luxury products, which previously had voraciously sought out European luxury brands.
