To The Moon

$NOV Inc(NOV)$ 's success with Semaglutide has more than quadrupled its market capitalization since 2018. On September 1, its market capitalization just over $421 billion during part of the trading day, briefly surpassed $LVMH-Moet Hennessy Louis Vuitton(LVMHF)$ to become Europe's most valuable company. Barclays predicts that the weight loss market will reach $100 billion a year within the next decade.

Danish pharmaceutical giant Novo Nordisk achieved a major milestone on September 1, replaced LVMH and briefly became Europe's most important and largest listed company by market capitalisation, marking the end of the French luxury group's 2.5-year reign at the top.

The LVMH Group is widely recognized as the world's leading luxury retailer, but the company has faced headwinds due to growing concerns about the economic situation.

In stark contrast, Novo Nordisk is currently experiencing peak demand for Semaglutide. The surge has pushed the company's earnings and stock price to record highs.

Novo Nordisk's shares have surged about 17% since the Aug 8, when it was announced that Smegelutide had significant cardiovascular benefits. This development bolsters the company's desire to go beyond its reputation as a provider of lifestyle drugs.

Novo Nordisk had a market capitalization of about $424.7 billion (taking into account unlisted shares) as of Friday's close, according to Refinitiv data and the number of shares disclosed by the company.

By comparison, LVMH, which is listed on the French exchange, has a market capitalization of $420.1 billion. This marks a turnaround from February 2021, when it replaced Nestle as Europe's largest listed company.

Novo Nordisk's share price has nearly tripled in the past three years, while LVMH, which owns iconic fashion houses such as Louis Vuitton and Dior, has doubled in value.

Marcel Stotzel, co-portfolio manager, Fidelity Europe Fund and Fidelity Europe Trust, commented on the situation, saying: "Novo Nordisk is close to LVMH as the largest stock in Europe by market cap, which reflects the success of Novo Nordisk's recent products, while the recent trend of LVMH is more complex." He added that the two stocks remain key holdings in his portfolio.

Novo Nordisk's shares are hovering near record highs, underscoring investors' approval of its strategic approach, which has given them a leading position in the booming market for weight loss drugs. Barclays predicts that annual sales in the market will reach $100 billion over the next decade, a significant leap from its current valuation of $6 billion.

Time & Market capitalization table of the largest European companies since the 21st century

Axelle Pinon, a member of Carmignac's investment committee, asserted that "market share should be evenly divided between Novo Nordisk and $Eli Lilly(LLY)$ , the two major players in the obesity treatment space."

Eli Lilly is expected to win U.S. approval for its weight loss drug Mounjaro later this year.

Novo Nordisk revealed on August 8 that study data demonstrated the significant ability of Semiglutide to reduce the risk of a major cardiovascular event such as stroke by 20% in individuals who are overweight or obese and have a history of heart disease. This exceeded initial expectations.

The results could persuade insurers and health authorities to expand coverage of Semaglutide, which costs $1,300 a month in the United States, to a wider range of patients.

"These results alleviate the challenges of future adoption of these drugs and confirm this market dynamic," commented Carmignac's Pinon.

Novo Nordisk shares closed up 2.14% on Friday, while LVMH shares fell 0.8%. LVMH shares have fallen 14.2% since hitting a record high in April, underperforming Europe's broader STOXX 600 index, which is down about 2.2% over the same period.