If you invested $1,000 in Novo Nordisk stock five years ago, here’s how much you’d have today.
At the time, the company was not well known to American investors. That’s not the case at all these days.
Even five years ago, the average American investor would not have been familiar with this. novo nordisk (NGO 0.32%). That’s because the Denmark-based company has yet to receive U.S. Food and Drug Administration (FDA) approval for its star drug, weight-loss treatment Wegovy.
How much of a difference five years and several regulatory approvals can make? Novo Nordisk followed Wegovy into prominence and its stock price soared accordingly.
5 times in 5 years
If you had invested $1,000 in Novo Nordisk on May 10, 2019, your investment would have more than quintupled to $5,320.
Novo Nordisk is Exhibit A of its philosophy of focusing on core competencies. More than 100 years ago, the most direct precedent for pharmaceutical companies was entering the insulin business. Since then, the main area of treatment has been diabetes.
Wegovy is part of that tradition. Ozempic and Ozempic, a related drug developed and approved as a diabetes treatment, both contain the same active ingredient called semaglutide, but the dosage is different.
The company won its first important FDA approval for Wegovy in 2021 and never looked back. Over the years, the drug has become popular as a weight loss treatment, especially in the United States, where many people struggle with obesity. This is a large market eager for products that can help shed pounds.
The numbers tell the story. In Novo Nordisk’s first quarter of 2024, Wegovy’s revenue doubled and then some, reaching nearly 9.4 billion kronor ($1.4 billion).
weight loss for financial gain
Building on this success, competitors are working hard to bring their own obesity treatments to market. Products that have recently received FDA approval include: ellie lily‘s Zepbound and others will soon get the green light.
It’s certainly a threat, but in this business the early mover advantage is absolutely critical. Moreover, Novo Nordisk is busy developing semaglutide for other potential therapeutic uses. We can easily imagine semaglutide expanding to other indications. This remains a business with a significant future, and on this basis, any investor should consider owning this business.
