One of the biggest pharmaceutical success stories of the past decade comes from a company that broke the rules of modern pharma strategy. While competitors diversified into dozens of therapeutic areas, Novo Nordisk doubled down on metabolic diseases. Their story began with an unusual founding that would shape their approach for the next century.
The Setup (1920s): Novo Nordisk came to be through a merger of two different entities. Nordisk Insulinlaboratorium founded by August Krogh and his wife Marie, after obtaining a license from Insulin scientists at the University of Toronto. Marie herself was sick with Diabetes at the time. On returning to Denmark after the tour, the couple setup their own insulin production company. Then, in 1925, a workplace squabble caused their employees, the Petersen brothers, to break away and form Novo Terapeutisk Laboratorium.
The Merger (1980s): Both companies operated as competitors in a small market for six decades. But economic logic, the limited talent pool of researchers, which they often poached from each other, a common vision for diabetes treatment, and the emerging single European market gave them basis to come back together in 1989. Their foundations and companies merged to create what we know today as Novo Nordisk.
A Century-Long Bet: Novo Nordisk resisted Big Pharma’s playbook of building a portfolio of medication that addresses dozens of conditions to maximise blockbuster potential. By focusing on diabetes treatment only for an entire century, they limited their total addressable market, created concentration risk, and missed opportunities in other areas This created some vulnerability for them.
What Nearly Went Wrong: Novo Nordisk faced an existential crisis in the 2010s when insulin pricing became a public scandal, forcing them to reduce prices by up to 75%. The pricing strategy backfired spectacularly after they reduced Levemir’s price, and insurers removed it from coverage, causing patient access to plummet from 90% to just 36%. They also faced regulatory battles with Danish tax authorities over the same pricing policies. Their core insulin business was under siege and they had no other business lines to fall back on.
How They Survived: Novo Nordisk runs a foundation structure, which means majority of its voting power rests with the Novo Nordisk foundation, not shareholders. This model gave them a rare commodity in the Pharma Industry, patience. When pricing issues hit the market most firms respond by cutting R&D or diversification of their product lines. But Novo Nordisk did the exact opposite. They invested 15-20% of revenue in R&D, doubled down on innovation and next-generation treatments instead of diversifying to maximise profit.
The Ozempic moment: Their deep work in insulin and GLP-1 biology laid the groundwork for the development of Ozempic, now widely known for weight loss. But weight loss was just a side effect, as it was originally developed to treat type II diabetes. In the early 90s, Lotte Knudsen, a researcher on the enzymes team, caught on to early work about GLP-1s and their ability to suppress appetite. She pitched it to the head of research, Mads Krogsgaard and for the next 20 years, Novo Nordisk researched and worked on the GLP-1 molecule before it made it to the market as a type II diabetes drug in 2017, and has now transformed Novo Nordisk’s market value.
Novo Nordisk’s century of specialisation created a metabolic disease empire built on understanding one problem better than anyone else, and has made them one of the most valuable companies globally, and the largest in Europe. They also have a nearly 55% market share in the GLP-1 drug category.
If you’re new to all this, GLP-1 is a natural hormone released after you eat that helps regulate blood sugar and reduce appetite. GLP-1 drugs mimic this effect and are used to treat type 2 diabetes and, more recently, obesity. The GLP-1 drug family includes Ozempic and Wegovy, both based on the same active ingredient: semaglutide. While Wegovy is the version officially approved for weight loss, many people experienced weight loss while taking Ozempic for diabetes long before Wegovy was available. As a result, “Ozempic” has become shorthand for the entire drug class, even though the two are prescribed at different doses for different purposes. When people say Ozempic, they mean semaglutide, the active ingredient in both drugs, but at different levels and for different use cases.