Wegovy-maker Novo Nordisk ousted CEO Lars Fruergaard Jorgensen on Friday over considerations the corporate is dropping its first-mover benefit within the extremely aggressive weight problems drug market.
Below Jorgensen’s management, Novo Nordisk grew to become a world chief within the profitable weight-loss drug market, with sky-rocketing gross sales of its Wegovy and Ozempic remedies.
Nevertheless, Novo’s shares have plunged since hitting a record-high in June final 12 months as competitors, notably from US rival Eli Lilly, makes inroads into its market share and as its pipeline of latest medicine has did not impress traders.
“The adjustments are made in mild of the latest market challenges Novo Nordisk has been going through, and the event of the corporate’s share worth since mid-2024,” Novo mentioned in its assertion.
Novo Nordisk Basis, the non-profit which controls the corporate by its funding arm, instigated the early exit at a gathering in April, a spokesperson mentioned.
Jorgensen informed Reuters in an interview that he didn’t see the choice coming, and was solely knowledgeable very just lately.
Days earlier, Novo Nordisk lower its gross sales and revenue forecast for the primary time for the reason that launch of Wegovy 4 years in the past, although Jorgensen had predicted a return to development in its greatest market within the second half of this 12 months.
Nonetheless, analysts and traders had been unconvinced of the necessity to exchange him, with Novo’s shares ending the day 1.8 % decrease.
“He was main the corporate for eight years and was for my part extraordinarily profitable,” Lukas Leu, a portfolio supervisor at Bellevue Asset Administration, informed Reuters.
Novo’s chairman Helge Lund tried to reassure analysts and traders on a name that the corporate’s technique was intact and the plan for executing it had not modified.
“The best way we all know Novo Nordisk is that usually you’ve gotten persistence while you’re heading in the right direction, and you then let issues transfer in the best route after you have the technique proper,” Danske Financial institution analyst Carsten Lonborg Madsen mentioned on that decision.
“It simply appears like there’s one thing that has gone fairly flawed right here,” he added.
The chairman informed Reuters that discussions had taken place over the previous few weeks. Jorgensen will stay in his function till a successor is discovered.
Eli Lilly, whose shares had been up 2.6 % on the information, has seen US prescriptions for its Zepbound weight problems shot surpass Wegovy since mid-March in its greatest market.
US approvals for Zepbound and Wegovy had been primarily based on separate trials, however Lilly’s drug helped sufferers lose extra weight.
Compound copycats, quickly allowed to alleviate provide shortages, have additionally damage demand, though Novo expects a ban on US pharmacies producing them to assist revive gross sales this 12 months.
Analysts forecast the weight problems drug market might be price as a lot as $150 billion by the early 2030s.
New Chief for New Challenges
Jorgensen, 58, oversaw the corporate’s strategic pivot into weight problems remedies which helped gross sales greater than triple.
Shareholder returns, together with dividends, have risen greater than 300 % since he grew to become CEO in January 2017, LSEG information reveals.
His exit comes at a difficult time for the worldwide pharmaceutical business as US President Donald Trump threatens to impose tariffs on imports and calls on drugmakers to decrease their US prescription costs.
Denmark’s enterprise minister warned on Friday in regards to the affect of Trump’s government order on drug costs and corporations.
Jorgensen’s exit shocked many traders, mentioned Mikael Bak, CEO of the Danish Shareholders’ Affiliation.
“Nevertheless, it isn’t solely sudden that an organization of Novo Nordisk’s calibre might have a distinct sort of chief when going through intense world competitors and stormy climate,” he mentioned.
Booming gross sales of Wegovy helped make Novo probably the most priceless listed firm in Europe, price $615 billion at its peak in June final 12 months, however its market worth has halved to about $310 billion.
The shares are down 32 % year-to-date and 59 % from their peak.
Buyers are fearful in regards to the firm’s drug pipeline notably following the disappointing trial information in December from its next-generation weight problems drug CagriSema.
Its patent for the lively ingredient in Wegovy and its diabetes drug Ozempic expires by 2032 in the US.
Camilla Sylvest, Novo’s head of economic technique and company affairs and a constant presence alongside CEO Jorgensen, stepped down final month with out citing a motive.
Former CEO of Novo Nordisk for 16 years and present chair of the Novo Nordisk Basis, Lars Rebien Sorensen, will be part of the board as an observer with speedy impact with the purpose of taking a seat on the subsequent annual common assembly, Novo mentioned.
By Stine Jacobsen and Jacob Gronholt-Pedersen; Edited by Terje Solsvik and Elaine Hardcastle
Be taught extra:
Why the Weight problems Drug Revolution Is a Work in Progress
GLP-1 weight-loss medicine like Wegovy and Zepbound are revolutionising weight problems therapy and producing billions for his or her makers, however challenges together with excessive prices, insurance coverage protection points, drug shortages, and competitors from copycats may affect their widespread success.
