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Danish pharmaceutical group Novo Nordisk, which makes the Wegovy diet drug, briefly surpassed French luxury group LVMH on Friday as Europe’s most valuable company.

The drugmaker’s market capitalization was just over $421 billion for part of the session, surpassing Moët & Chandon champagne and Louis Vuitton maker LVMH. LVMH earlier this year became the first European company to break the $500 billion valuation mark.

The Danish company is the only pharmaceutical producer on the list of Europe’s most valuable companies that is heavily skewed towards the luxury sector. Other luxury brands in the top 10 by market capitalization include French cosmetics maker L’Oréal and fashion house Hermès.

Novo’s success with Wegovy has more than quadrupled the value of its stock since 2018. The company’s market cap peaked even higher at $423 billion in August after it released trial data showing Wegovy reduced the risk of serious cardiac events, such as heart attacks, by 20%. However, LVMH was valued at a higher value at the time.

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Also in August, Novo raised its annual sales forecast, partly due to higher demand for Ozempic. Designed for diabetics, the drug contains the same active ingredient as Wegovy, which is also used by clinicians to treat obesity.

Emily Field, an analyst at Barclays, said Novo Nordisk had been an exciting pharma specialist since Wegovy was approved in the US two years ago. However, it is now attracting the attention of a broader investor base.

She added that positive results from a recent study of Wegovy’s impact on heart disease and strong earnings from its rival, Eli Lilly, came on the same day as a game-changer.

“It felt like it made a lot of people aware of the story,” she said.

While Europe doesn’t have the biotech industry as big as the U.S., she said, there are some “amazing companies” with innovative scientists like Novo Nordisk.

The results have led analysts to predict that Novo will be able to convince more insurers and health systems to pay for the drug.

Novo is the largest maker by sales in the fast-expanding diabetes and new weight-loss drug market, which analysts predict will generate annual global sales of $130 billion to $140 billion.

Indianapolis-based Eli Lilly is the Danish company’s biggest competitor in the field. Eli Lilly has applied for regulatory approval to use its diabetes drug Mounjaro to treat obesity.

The expansion of the market has also led Chinese companies to develop domestic knockoff versions of Wegovy.

Novo also announced plans to acquire Inversago Pharma, a company that makes drugs for metabolic diseases such as diabetes and could also be used to treat obesity, in a deal worth as much as $1.1 billion.

The Danish company has become so important to its homeland that its performance is the only factor ensuring that the Danish economy expanded rather than contracted in the second quarter of this year.

Additional reporting by Richard Milne

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