It's arguably unsurprising, given what they say about necessity and innovation, that the two biggest market stories of 2023 were productivity-enhancing artificial intelligence (AI) and appetite-repressing drugs. The biggest problem facing developed economies at the start of last year was that wars and pandemics had combined to reduce the supply of labour and energy, and push up the prices of everything else. Both AI and weight-loss drugs have existed for decades, but last year saw a breakthrough in terms of commercial viability.
There is evidence suggesting that weight-loss drugs, known as GLP-1 agonists, make people feel full even if they haven't eaten. In 2005, these GLP-1 agonists received approval from the Food and Drug Administration in the US as a diabetes treatment. However, in 2023 there was a broadening appreciation of its use cases. The year before, Novo Nordisk's (DK:NOVO) drug, Wegovy, was approved for weight-loss treatment in the EU, and last year the NHS started offering it in the UK. The drug has proved a hit in the US, too, and correspondingly Novo Nordisk’s revenue increased by 30 per cent to €31bn last year while its operating profit increased by another 35 per cent.
Revenue from Wegovy increased 409 per cent to $4.6bn (£3.7bn) and FactSet broker consensus is for sales to almost double again over the next year. Correspondingly, Novo Nordisk’s share price increased 54 per cent last year and it is now the most valuable company in Europe.