A few days ago, Novo Nordisk cut sales and profit forecasts for the first time since the launch of Wegovy four years ago.
Wegovy-Maker’s Novo Nordisk has expressed concern that CEO Lars Fruergaard Jorgensen is losing its first fate advantage in the highly competitive obesity drug market.
Novo Nordisk announced its decision on Friday.
A few days ago, Novo Nordisk cut sales and profit forecasts for the first time since the launch of Wegovy four years ago, while Jorgensen predicted a return to growth in its biggest market later this year.
Novo Chairman Helge Lund tried to reassure analysts and investors over a call that the company’s strategy was unscathed and plans to implement it have not changed.
He told Reuters that debate on replacing Jorgensen has occurred over the past few weeks. Novo previously said that Jorgensen will remain in his role until he finds a successor.
Under Jorgensen’s leadership, Novo Nordisk became the global leader in the Weitros drug market, with sales of Wegovy and Ozempic Treatments skyrocketing.
Analysts and investors were not convinced of the need to replace him.
“He led the company for eight years and in my opinion it was very successful,” Lukas Leu, portfolio manager at Bellevue Asset Management, told Reuters.
Danske Bank analyst Kirsten Lomborg Madsen was similarly caught off guard.
“What we know about Novo Nordisk is that we usually have patience when we’re on the right track, and when the strategy is right, it moves things in the right direction,” he said.
“I feel like there’s something quite wrong here,” he said over the phone.
Novo’s shares have plummeted since it hit a record high in June last year, especially as competition with US rival Eli Lily entered market share and a new drug pipeline failed to impress investors.
“The changes will be made in light of the recent market challenges facing Novo Nordisk and the company’s stock price development since mid-2024,” Novo said in a statement.
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Jorgensen, 58, has been CEO since 2017. He said in an interview with Danish broadcaster TV2 that he did not find this decision to come, but only the most recent notices were notified.
Wegovy’s booming sales have made Novo worth $615 billion, the most valuable listed company in Europe at its peak in June last year, bringing its market value to about $310 billion.
Novo Nordisk’s stock fell on the news, trading 0.8% lower at 14:01 GMT after a 4% rise early in the day.
Stocks fell 32% from an all-time high, and 59%.
Eli Lily has seen our prescription for Zepbound obesity shooting since mid-March in its biggest market. Eli Lilly’s shares rose 2.6% after news.
Camilla Sylvest, head of Novo’s commercial strategy and corporate affairs and consistent with CEO Jorgensen, resigned last month without giving a reason.
Lars Rebien Sorensen, former CEO of Novo Nordisk and current chairman of the Novo Nordisk Foundation for 16 years, said he will be joining the board as an observer with the aim of taking his seat at the upcoming annual meeting.
The company is controlled by the Novo Nordisk Foundation through its investment division, which owns 77% of its voting shares.