Novo Nordisk, Denmark’s fat jab pharmaceutical giant, reached an unwelcome milestone last week.

After a dizzying 76pc plunge in its share price over the past 18 months, a torrid week of trading meant it finally gave up the last of its market gains recorded since June 2021 when it released pioneering weight-loss drug Wegovy.

It follows years in which Novo Nordisk has been arguably Denmark’s greatest global success story. Its first-mover success with Wegovy and Ozempic turned it into Europe’s largest company, with the $100bn (£74bn) weight-loss drugs market at its feet.

The tide has since turned. This week, Novo admitted that its newest drugs were showing less promise in trials than those of its American rival Eli Lilly. It has also yielded to Donald Trump’s demand for hefty price cuts in the hitherto lucrative US market.

Novo is now in a metaphorical weight-loss programme of its own. It has shed its long-serving chief executive, cut 11pc of its workforce and lost hordes of foreign shareholders.

This is not a typical tale of corporate tumult. Novo is such a colossus in Denmark that its ructions can shake the country’s whole economy.

Yet Mette Frederiksen, the country’s Left-wing prime minister, chose this moment to take the country to an early election, set for March 24.

Since taking office in 2019, Frederiksen has steered Denmark through the turbulence of the pandemic, the Ukraine war and Trump’s threats to seize Greenland.

She will be hoping that Novo’s travails do not derail her bid for a third straight election victory.

It is something of a gamble. Novo’s fate is inextricably linked to that of the economy and thus to her own political prospects.

The company sold 309bn krone (£36bn) of drugs last year, which is more than 10pc of Denmark’s annual $430bn GDP. It employs one in every 100 Danes.

As Novo’s crisis deepened, Denmark’s economy – which was one of the fastest-growing in Europe – slowed dramatically at the end of last year. The country recorded 2.2pc growth in the third quarter, falling to just 0.2pc in the fourth.

Per Hansen, an economist at bank Nordnet, says: “One of the engines that has been driving the Danish economy over the past two to three years has been Novo Nordisk and the pharma industry.”

Las Olsen, the chief economist at Danske Bank, says that if you remove the pharmaceuticals sector, Denmark’s growth rate would be more like 1pc or 1.5pc.

“Which is fine, of course – but not the stellar growth rate that we have seen in the headline numbers,” he says. “I think we will grow more in line with European economies, perhaps a little less.”

These aren’t views that will cheer up the gloomy Danes.

Measures of Danish consumer confidence have languished in deeply negative territory ever since Russia invaded Ukraine.

“It’s a conundrum,” says Helge Pedersen, the chief economist at Nordea Bank. “House prices are at a record high, there’s almost no unemployment – everything is good but consumers are depressed.”

He says ordinary Danes are still preoccupied with inflation, even though the official rate is just 0.8pc.

“People are still worried about inflation, in particular food prices. We all discuss meat prices, they’re so high, coffee prices, chocolate prices. But that’s perceived inflation, which is higher than reality.”

Frederiksen and her centre-Left coalition partners have already started delving into the public coffers to soothe voters’ disgruntlement.

The Danish government recently cut the tax on electricity bills to almost zero. It also increased spending on childcare and welfare support and removed taxes on coffee, chocolate and sugar.

It has plenty of fiscal firepower. It was running a budget surplus estimated at more than 2pc of GDP in 2025 and its debt-to-GDP ratio was 30pc last year, one third that of Britain.

That allowed Denmark to ramp up defence spending last year by more than $4bn, which – along with higher healthcare expenditure – may prop the economy through any pharma slowdown.

The defence spending is a response to the Russia threat and also to pressure from Trump. He has called for Europe to fund its own defence and he is looking to wrestle at least de facto control over the Danish territory of Greenland.

Hansen says the Greenland issue may also have cast a pall over consumer confidence.

“Danish people are afraid that the new world order that is initiated by Mr Trump is something we have not dealt with since World War Two. That is really what is scaring the Danes,” he says.

Paradoxically, though, it may be helping the tough-talking and experienced Frederiksen. Since Trump’s Greenland manoeuvring became more explicit and tangible, her Social Democratic Party’s previously fading popularity has rebounded.

Geopolitical uncertainty and cost of living pressures are common across Europe. But in Denmark, there could be another more idiosyncratic source of economic anxiety.

Around 10pc of Danes hold shares in Novo. Many more will be exposed to its precipitous share-price decline via their private pensions.

Hansen, though, says Danish investors have been strangely patriotic: as foreigners have fled, Danes have been buying up the stock.

“The number of Danish private clients with us that hold one or more Novo Nordisk shares keeps climbing,” he says. “People still think there is a difference between what Novo Nordisk will achieve longer term and its current valuation in the stock market.”

Denmark’s economists, like its investors, also seem relatively sanguine about their country’s economic champion. Olsen says he was more worried during Novo’s breakneck growth phase than he is now.

“The fear was that it might erode the competitiveness of the rest of the economy. The large amount of hiring at Novo Nordisk could have led to very high base growth, that would then leave the rest of the economy uncompetitive if something was to go wrong,” he says.

“But what we have seen so far is that manufacturing wages growth in Denmark has, if anything, been lower over the last four or five years than we see in competitor countries. There is a competitive economy outside of Novo Nordisk.”

Pedersen agrees that the Danish economy is diversified enough to weather the Novo storm: “But of course you should keep an eye on it because the numbers are still so big on the macro level.

“Politicians do need to be aware that we have two Denmarks – one with and one without the pharmaceutical industry.”

Right now, the politician with the most riding on the Danish pharmaceuticals industry is Frederiksen.

As she called the election, she talked mostly about Greenland and wealth taxes.

Novo Nordisk’s decline might have garnered global attention with the company no longer deemed Denmark’s greatest success story.

Yet for Frederiksen, the hope is that this will simply be background noise as she bids for a third straight election victory – instead of a shot in the arm for her political rivals.

Try full access to The Telegraph free today. Unlock their award-winning website and essential news app, plus useful tools and expert guides for your money, health and holidays.