Danish Pharmaceutical Leader Novo Nordisk... Continuous Innovation and Challenges of a 100-Year-Old Company [AK Radio]

Entering Insulin Production Since the 1920s
Expanding Beyond Diabetes and Obesity to the Entire Metabolic Syndrome

A pharmaceutical company that started in the small Danish city of Copenhagen is shaking up the global medical world. Novo Nordisk has recently gained worldwide attention due to the explosive success of its obesity treatment drug 'Wegovy,' but in fact, the company's history and innovation date back 100 years. Starting as a pioneer in diabetes treatment, Novo Nordisk is now opening a new chapter in obesity treatment. Let's take a look at the success story of Novo Nordisk and its future challenges.

The history of Novo Nordisk goes back to the discovery of insulin in 1921. Just two years after insulin was discovered in Canada, in 1923, the 'Nordisk Insulin Laboratory' was established in Denmark. Two years later, in 1925, another company called 'Novo Therapeutics' was founded and entered insulin production. These two companies competed in good faith for decades before merging in 1989 to form today's Novo Nordisk.

Since its establishment, Novo Nordisk has led the diabetes treatment field through continuous innovation. It developed the world's first genetically recombinant insulin and also created pen-type insulin self-injectors that patients can easily use at home. Thanks to these innovations, Novo Nordisk has established itself as a global leader, holding more than 30% of the global insulin market share.

[Image source=Reuters Yonhap News]

Recent success at Novo Nordisk stems from the development of GLP-1 (Glucagon-like peptide-1) hormone analogs. GLP-1 is a hormone secreted by the intestines during food intake that slows digestion and promotes insulin secretion. In 2009, Novo Nordisk launched 'Victoza,' an innovative diabetes treatment based on GLP-1 analogs.

As weight loss was observed in patients using Victoza, Novo Nordisk recognized the potential to apply this to obesity treatment. In 2015, the company launched 'Saxenda,' a daily injectable obesity treatment, and in 2021, introduced 'Wegovy,' an improved version administered once weekly. With the explosive success of Wegovy, Novo Nordisk has emerged as a leader in the obesity treatment market.

Novo Nordisk's success has had a significant impact on the Danish economy. The company's market capitalization exceeds Denmark's entire GDP, and in recent years, it has raised Denmark's GDP by 2 percentage points. One in five Danish individual investors owns Novo Nordisk stock, making it a national stock.

Moreover, Novo Nordisk's influence extends beyond Denmark to the global stage. Success in the U.S. market is particularly notable, with 60% of total sales generated in North America. This drives the company's growth but also poses potential risks.

[Image source=Reuters Yonhap News]

One of the biggest challenges Novo Nordisk faces is U.S. drug pricing policy. In 2016, the U.S. government pressured for insulin price reductions, citing excessively high prices, which temporarily affected the company's sales and stock price. Recently, similar concerns have been raised regarding the U.S. sales price of Wegovy.

The Danish government has expressed concerns about the national economy's excessive dependence on a single company, Novo Nordisk. It is wary of the potential impact on the national economy should the company fail, similar to the Nokia case in Finland.

One of Novo Nordisk's secrets to success is its strategy focused on specific diseases: diabetes and obesity. From the start, it targeted the global market beyond Denmark's small domestic market by developing and marketing specialized products.

For over 100 years, Novo Nordisk has consistently invested in diabetes treatment development. This steady research and development led to innovative achievements such as the discovery of GLP-1 analogs and ultimately created new opportunities in the obesity treatment market.

The Danish government's pharmaceutical and biotech industry support policies have also played a crucial role in Novo Nordisk's success. Copenhagen's 'Medicon Valley' is Europe's top bio-cluster, where more than 20 pharmaceutical companies, over 80 biotech firms, and more than 100 medtech companies gather to create synergy.

Obesity is a growing global health issue, and Novo Nordisk's obesity treatment market holds significant growth potential. Building on the success of Wegovy, the company is expected to pursue continuous innovation and growth in this field.

In addition to diabetes and obesity, Novo Nordisk is expanding its research into various metabolic diseases. Attention is focused on whether the company can continue innovation in new treatment areas based on its accumulated technology and experience.

Other global pharmaceutical companies, recognizing the growth potential of the obesity treatment market, are also entering this field. How Novo Nordisk maintains its current leading position and responds to competition will be a future challenge.

Novo Nordisk's success story highlights the importance of continuous innovation and focus. The background behind a small Danish company leading the global pharmaceutical market includes 100 years of research and development, bold investment, and insight that did not miss serendipitous discoveries. It will be worth watching how Novo Nordisk overcomes upcoming challenges, continues new innovations, and what impact this will have on the global healthcare industry.

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