On Tuesday (August 20th) local time, preliminary data released by the Danish National Bureau of Statistics showed that the country's GDP resumed month on month growth in the second quarter of this year, highlighting its economy's heavy dependence on the pharmaceutical industry.
Specific data shows that Denmark's initial real GDP for the second quarter of 2024 increased by 0.6% compared to the first quarter. Analysis indicates that this growth was driven by Danish pharmaceutical companies, which performed poorly in the first quarter, resulting in a 1% quarter on quarter decline in the country's GDP.
Source: Danish National Bureau of Statistics
At present, two drugs from Denmark are being snapped up all over the world, namely Smeglutide injection for weight loss and type 2 diabetes of Novo Nordisk, and smallpox/monkeypox vaccine "MVA-BN" of Bavarian Nordic A/S.
Palle Sorensen, Chief Analyst of Danish Financial Services, wrote that pharmaceutical companies play a "disproportionately important role" in Danish industrial production, resulting in "significant fluctuations" in GDP data every quarter.
In May of this year, the Danish government considered Novo Nordisk's optimistic outlook and raised its economic growth rate forecast for 2024 to 2.7%, almost twice the estimate from December last year (1.4%). The Ministry of Economy also raised its export growth forecast for this year from 4.2% to 7%.
At that time, the Ministry of Economic Affairs stated that Novo Nordisk's efforts to expand production capacity also drove short-term construction investment. Meanwhile, Bavaria and Northern Europe are expected to add fuel to the fire. Last week, the World Health Organization announced that the monkeypox outbreak constituted an "international public health emergency of concern," which could significantly boost demand for monkeypox vaccines.
Currently, MVA-BN from Bavaria Nordic (marketed as Jynneos in the United States, Imvanex in Europe, and Imvamune in Canada) remains the only monkeypox vaccine approved by the FDA and EMA worldwide, with a price of approximately $100 per dose.
It should be pointed out that in addition to these two heavyweight drugs, Novo Nordisk has also been successful in insulin, and Denmark's Lundbeck has a strong influence in the field of brain diseases such as schizophrenia, Alzheimer's disease, and Parkinson's disease.
This Nordic country with a population of less than 6 million has achieved extraordinary success through its strength in the pharmaceutical industry. In the 2023 World Competitiveness Ranking Report by the International Institute for Management Development (IMD) in Lausanne, Switzerland, Daimler ranks first, although it fell to third place in 2024.
The analysis points out that the sensation of Danish drugs may seem sudden, but it has actually been brewing for decades, largely due to the cluster effect created by pharmaceutical companies. Less than a year after the establishment of Novo Nordisk 100 years ago, Lingbei, as mentioned earlier, also entered the pharmaceutical market.
In the 1990s, with the support of the Danish public sector, strong universities, and convenient financing channels, Bavarian Nordic Company, Genmab A/S, and Zealand Pharma A/S were successively established.
Danish biotechnology entrepreneur Christian Grondahl told the media, "Many countries want to replicate what's happening here, but it's not easy." He said, "You need a lot of factors to replicate success
The ownership structure that prioritizes long-term strategies over short-term profits has consolidated the steady development of Danish pharmaceutical companies. Novo Nordisk and Lingbei are both controlled by foundations, and this model helps keep these two companies in Danish hands at all times.
Before the explosion of GLP-1 drugs, Novo Nordisk had already become one of the "Big Three" global insulin giants. Grondahl said, "When you visit Danish biotech companies, you always come across people who have worked at Novo Nordisk before. This has already created a snowball effect
Since the beginning of the year, Novo Nordisk's US stock market has risen by 30% and has become the largest listed company in Europe, with a market value 1.6 times that of the second ranked LVMH; Another weight loss drug manufacturer listed in Denmark, Zealand Pharma, saw its stock price rise by over 150%.
Adam Steensberg, CEO of Zealand Pharma and a former executive at Novo Nordisk, believes that Denmark's leading position in the pharmaceutical industry is attributed to the stable talent flow provided by Novo Nordisk and Lingbei pharmaceutical universities and doctoral programs, as well as the Danish government's willingness to fund long-term projects.