Eli Lilly shares are surging. Up a quarter over the past month and with a market capitalisation of more than $960 billion (€825 billion), Lilly is on the verge of becoming America’s latest trillionaire company.
Novo Nordisk shareholders must be wincing. Last year, Gemma Game, healthcare strategist at Norway’s sovereign wealth fund – the world’s largest such fund – suggested Novo and Lilly could become the world’s first trillion-dollar healthcare companies on account of demand for their weight-loss drugs.
While Lilly, which produces the active ingredients for its weight-loss drugs Mounjaro and Zepbound at its Kinsale plant, is indeed closing in on the milestone, Novo has lost almost 70 per cent of its value.
The divergence highlights a wider pattern: Europe is increasingly absent from the top tiers of the global stock market.
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Lilly would become the 10th US firm to be valued above $1 trillion. In contrast, not one of the world’s 25 most valuable companies is European.
Semiconductor equipment company ASML, now Europe’s most valuable firm, ranks only 28th, with a market cap of about €345 billion.
Novo’s collapse has pushed it down to 75th, and with a market cap of €185 billion, trillionaire talk looks more distant than ever.
Even though Europe and the US have similar-sized economies, there is no competition when it comes to stock market importance. The US now accounts for 72.7 per cent of the MSCI World Index, compared to with just 2.6 per cent for Europe’s biggest stock market, France.
The story, then, is not simply about individual companies. Many possible explanations have been offered, including fragmented markets, limited venture capital, conservative investor cultures, and regulation that prioritises stability over growth.
Explanations aside, it’s clear that in a world dominated by trillion-dollar giants, Europe is an increasingly distant runner in the global race.
