After the World Health Organization warned this week that a rapidly spreading strain of mpox poses a global threat, Denmark once again holds a potential solution and has underlined its ability to eclipse traditional powers the United States and the United Kingdom.
From diabetes treatments to depression, the Nordic nation of 6 million people has exceeded expectations with its pharmaceutical prowess, and Bavarian Nordic A/S’s mpox vaccine – the only inoculation approved by regulators for the deadly virus – is the latest milestone.
What might seem like an overnight sensation has been brewing for decades and much of it stems from a clustering effect created by Novo Nordisk A/S. The maker of blockbuster diabetes treatment Ozempic and slimming drug Wegovy has nurtured a talent pool and generated new peers on its way to becoming Europe’s most valuable company in September last year.
“Many people want to repeat what is happening here, but it is not that easy”“There are a lot of ingredients needed to replicate success,” said Christian Grondahl, a Danish biotech entrepreneur who previously founded and sold two startups.
The origins of this development go back more than 100 years, when the first Danish pharmaceutical companies were founded. Novo Nordisk was founded in 1923following the example of H Lundbeck A/S, a manufacturer of anti-depression pills.
The long tradition was driven by a combination of public sector collaboration, strong universities such as the Technical University of Denmark and easy access to funding. Bavarian Nordic, Genmab A/S and Zealand Pharma A/S (which is also working on a weight-loss drug) was founded in the 1990s.
Ownership structures that prioritize long-term strategies over short-term profits further support sustained development. Both Novo and Lundbeck are controlled by foundations, a model that helps keep them in Danish hands.
However, Novo’s rise has boosted the entire sector in recent years. “When you move around the Danish biotech sector, you always come across people who have worked at Novo,” says Grondahl. “It has become a snowball effect.”
As the world’s largest insulin manufacturer, the local giant has long been a loyal follower of the Danes, but became a global phenomenon after discovering the weight loss benefits of a diabetes treatment based on the body’s natural hormone GLP-1.
Since then, production from Ozempic and Wegovy has become so important that Novo helped explain about half of the Danish economy’s growth in 2023. Boosted by the company’s expansion, the government almost doubled its growth estimate for this year to 2.7%, outpacing most other European Union economies. Economists have even coined the term “Novonomics” to describe how influential the drugmaker has become.
But Denmark’s exposure to the unpredictable nature of pharmaceuticals is not without risk. Novo’s market capitalization, At $600 billion, it’s bigger than the entire Danish economy, and while its drugs have won over the rich and famous, trends can change quickly.
The country’s sensitivity was made clear when Prime Minister Mette Frederiksen said earlier this year that she was a “big fan” of Novo’s treatments. It was a rare public show of support and came at a time when the company is facing growing criticism in the United States over its pricing.
Despite the growing weight of the pharmaceutical industry, lThe MPOX crisis shows how far Denmark’s offering has expanded. The Bavarian vaccination program was developed after the September 11 attacks, when the United States decided to stock up on smallpox vaccines as part of its anti-terrorist program.
Bavarian beat out UK-based Acambis Plc to win the contract. Although not announced at the time, the deal proved decisive in 2018 when the UK recorded its first case of mpox, a variant of smallpox that causes painful rashes and can be fatal. Bavarian’s Jynneos vaccine was approved for mpox in the US in 2019 and in Europe in 2022.
Last year, Jynneos sales almost tripled to around 5 billion krona ($740 million), which represents 71% of Bavarian’s annual revenue. That potential could increase following the WHO warning.
Bavarian said on Friday that it wants to extend the formal approval of its vaccine mpox to include teens, sparking another rally in the stock, which has gained more than half this year.
“We have inventory and we have the capabilities,” Bavaria CEO Paul Chaplin told Bloomberg earlier this week, saying the company can provide 10 million doses by the end of 2025. “What we lack are the orders.”
On Saturday, the company said it was working with the WHO. to provide broad access to its mpox vaccine and was in talks with the Africa Centers for Disease Control and Prevention to expand manufacturing capacity on the continent.
In addition to Bavarian’s jump, investors have flocked to the Danish pharmaceutical sector. Novo has gained a third so far this year and Gubra A/S (a smaller company developing an obesity drug) has seen its value increase almost fivefold.
Zealand Pharma has doubled in value and is an example of how Denmark’s pharmaceutical sector is basking in the Novo halo. A recent $1 billion capital increase was oversubscribed in just three hours, despite Zealand It is relatively unknown in Denmark, let alone on Wall Street.
Although its weight-loss treatment is still in the testing stages, interest is being driven by the country’s track record and speculation that Zealand could attract takeover interest from a major pharmaceutical company looking for a weight-loss asset.
Ozempic’s secret recipe behind Novo’s race to boost supplies
Zealand’s market value has increased from 10 billion crowns at the beginning of 2023 to 66 billion crownsThe gains have secured it a place on Denmark’s benchmark OMX25 index, which now includes four drugmakers and five other medical-related companies.
Adam Steensberg, CEO of Zealand and a former Novo employee, attributed Denmark’s status in the pharmaceutical sector to a steady stream of talent coming from Novo and Lundbeck’s universities and PhD programmes, as well as the government’s willingness to finance long-term projects. He noted that parallel developments have also been observed in the field of green energy, where Denmark is also a world leader.
“In Denmark, we are willing to invest not only in the problems that the world is facing right now, but also in the problems that we know will arise at a later stage,” Steensberg said in an interview.
