Novo Nordisk ousts CEO amid sinking share price

DENMARK – In a surprising move, Danish drugmaker Novo Nordisk has removed CEO Lars Fruergaard Jorgensen, signaling growing internal concern about the company’s performance in the fast-growing obesity drug market.

Jorgensen, who has led the company since 2017, was credited with turning Novo into a global heavyweight, especially with the success of weight-loss drugs Wegovy and Ozempic. Under his leadership, sales tripled, and shareholder returns soared over 300%.

Despite these achievements, recent months have seen cracks in Novo’s dominance. Shares have plunged 32% this year and nearly 60% from their peak in June 2024, wiping out over US $300 billion in market value.

The fall follows rising pressure from U.S. rival Eli Lilly, whose Zepbound obesity drug has quickly overtaken Wegovy in prescriptions since March.

Investor confidence has also been shaken by underwhelming trial results from Novo’s next-generation drug CagriSema and worries about its innovation pipeline. Novo said the leadership change was prompted by recent market challenges and share performance.

The decision reportedly came from the Novo Nordisk Foundation, which controls the company through its investment arm. Jorgensen, 58, said he was caught off guard, having only recently been informed of the board’s decision.

Just days before the announcement, Novo Nordisk had cut its sales and earnings forecast for the first time since launching Wegovy four years ago.

While Jorgensen remained optimistic about a rebound later this year, many analysts were unconvinced. Some questioned the timing and necessity of his departure, with shares dropping 1.8% following the news.

Adding to the leadership shakeup, Camilla Sylvest, head of commercial strategy and a key figure alongside Jorgensen, resigned last month without offering a reason.

Meanwhile, Lars Rebien Sorensen, former CEO of Novo Nordisk and current chair of the Novo Nordisk Foundation, will join the company’s board as an observer and is expected to become a board member at the next AGM.

Although Novo’s long-term strategy remains unchanged, the leadership shift reflects the urgency to respond to a more competitive, high-stakes market.

Eli Lilly’s rise and the temporary availability of generic versions of weight-loss drugs have added pressure, even as Novo expects a regulatory clampdown on such copycats to improve sales.

With the global obesity drug market forecasted to hit US $150 billion by the early 2030s, the stakes are high.