Novo Nordisk is bigger than Denmark’s economy — but the prime minister isn’t worried about another Nokia

Denmark Prime Minister Mette Frederiksen downplayed concerns that Ozempic maker Novo Nordisk (NVO), the Scandinavian nation’s largest corporation, could someday drag down its economy the way the once-dominant Nokia (NOK) did to Finland in the 2000s.

With a market value of $570 billion, Novo Nordisk has surpassed Denmark’s annual GDP. However, Frederiksen told Bloomberg on Monday that she didn’t see any risk associated with the size of Novo Nordisk.

“I am extremely proud that we have big, now global, companies coming from Denmark. I don’t see a lot of risks with even the size of some of the companies, because we have a very strong economy also in other sectors,” Frederiksen said. “But we have of course to watch it.”

Unrelenting demand for Novo Nordisk’s diabetes and weight loss drugs has made Novo Nordisk the most valuable company in Europe, surpassing luxury conglomerate LVMH last year.

The Danish pharma giant helped boost the nation’s GDP in 2023 and is expected to do so again in 2024. The Nordic country’s largest bank, Danske Bank, forecast earlier this year that Denmark’s GDP will grow 2.1% in 2024, due primarily to Novo Nordisk.

In 2023, Denmark’s GDP grew 1.8% — and much of its boost is owed to the pharmaceutical industry. Without pharmaceuticals, the agency says, the country’s GDP would have instead fallen 0.1%.

Leading that growth is Novo Nordisk, with analysts expecting continued sales increases. Morgan Stanley analysts anticipate that the global market for GLP-1 drugs like Ozempic will reach $105 billion by 2030.

The company reported in January that its 2023 sales jumped 31% to 232.3 billion Danish kroner ($33.8 billion), compared with 177 billion Danish kroner ($25 billion) in 2022. It also projects sales will increase by up to 22% to 28% in 2024.

The situation is beginning to resemble Finland’s past reliance on Nokia, the once-dominant telecommunications company. According to estimates from the Finnish Economic Research Institute, Nokia accounted for 25% of Finland’s GDP growth between 1998 and 2007.

But when rising competition from Apple (AAPL), Google (GOOGL), and Samsung in the smartphone market led to Nokia’s rapid decline in the early 2010s, Finland faced significant economic challenges. This downturn, combined with the effects of the Great Recession, resulted in widespread job losses and ushered in over a decade of economic difficulties for the country.

Addressing concerns that Denmark could face similar challenges with its reliance on Novo Nordisk, Frederiksen emphasized the country’s economic diversity. “A good thing is that our export portfolio is spread across several areas that are less sensitive to the business cycle than in other places,” she said.

Denmark is also home to other major companies like Carlsberg, AP Moller-Maersk, Vestas Wind Systems, and Lego.

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