2023-08-10 03:44:01
The Danish pharmaceutical group Novo Nordisk is the most valuable listed company in Europe after the luxury group LVMH.
When the money is flowing and the forecasts are right, ethics and morals become secondary for some investors. This can be observed again and again on the financial markets. The Danish pharmaceutical company Novo Nordisk, whose controversial weight loss injection has been causing a worldwide sensation for months, has also been very popular with investors for months. The share value has almost doubled within a year and quadrupled within five years.
On Tuesday, new study results triggered renewed course fireworks. According to this, the active ingredient semaglutide contained in the weight loss products reduces the risk of strokes and heart attacks in overweight people by 20 percent. The clinical study included 17,600 adults over the age of 45 who were overweight or obese and had cardiovascular disease. An analyst at British bank Barclays spoke of a “home run” for Novo Nordisk shares. The results of the study could not have been better. The US bank JPMorgan sees “a revolutionary turning point in the treatment of obesity”.
The Danish pharmaceutical group is now the most valuable listed company in Europe after the luxury brand LVMH (Louis Vuitton). Doctors have so far been much more differentiated in their assessment than stock marketers. Novo Nordisk is on the market with the brands Ozempic and Wegovy. The former is exclusively for diabetics and is paid for by the health insurance company after approval by a chief physician. Public hype, on the other hand, flared up around Wegovy. In the USA, a number of celebrities announced on social networks that they had lost significant weight in a short time with the weight-loss injection. The drug has meanwhile also become a big topic for people of normal weight and non-diabetics. Doctors emphasize that there are no long-term studies. In addition, there are reports of a yo-yo effect, i.e. increasing weight again as soon as you stop using the syringe. Criticism was caused by the fact that, according to research by the Observer newspaper, Novo Nordisk had paid around 25 million euros to the British healthcare system and its consultants in the years before Wegovy was approved.
The hype surrounding Wegovy was so great that the product was hardly available in the USA recently. From May, access for new patients to the US market was restricted, the group said. According to this, 100,000 Wegovy prescriptions were issued per week in the USA alone at the time. No wonder the group’s sales and profits are bubbling up. This Thursday, the Danes will report on the results for the second quarter of 2023. The stock is very expensive after the recent price rally, the price-earnings ratio (P/E) is 45.
The Tupperware share currently shows that price surges in shares do not always have to be associated with good business success. The famous manufacturer of closable plastic tableware is heavily in deficit and has been struggling with liquidity problems for a long time. Still, the stock shot up from 50 cents to over $4.5 – a ninefold increase in three weeks. Incidentally, in good times, Tupperware stock was worth $90.
In fact, the recent price surge has nothing to do with economic facts. Rather, the share has become a plaything for speculators. Some bet on falling prices, others on the opposite. This increases trading volume in the stock and triggers crazy price movements – up and down, depending on which side is stronger. So it’s quite possible that the stock will soon be worth less than a dollar again.
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