On Friday, Novo Nordisk, the maker of Ozempic and Wegovy, dismissed its CEO, Lars Fruergaard Jorgensen, marking the end of a significant leadership chapter as it navigates a tough climate in the competitive obesity drug sector.
This move came shortly after the Danish pharmaceutical giant adjusted its sales and profit projections downward for the first time since Wegovy’s introduction four years ago. Interestingly, Jorgensen had been optimistic about a rebound in the U.S. market later this year.
Chairman Helju Rand addressed analysts and investors, assuring them that the company’s strategic plans remain intact despite the leadership change.
He mentioned to Reuters that discussions regarding Jorgensen’s departure had been ongoing for some weeks.
Novo had indicated that Jorgensen would stay on until a successor was identified.
Since peaking last June, Novo’s stock has faced a significant decline, exacerbated by increasing competition from Eli Lilly and disappointment regarding the new drug pipeline.
Eli Lilly has been making strides with its Zepbound obesity medication since it emerged earlier this year in the U.S. market.
Following the leadership news, Eli Lilly’s stock jumped by 2.6%.
Novo acknowledged the changes were in response to recent market pressures impacting its stock, which has fallen by about 32% annually and is down 59% from its all-time high.
During Jorgensen’s tenure, which began in 2017, Novo Nordisk rose to prominence in the weight loss drug market, witnessing significant sales from Wegovy and Ozempic.
However, the decision to replace him left many analysts unconvinced. Lukas Leu, a portfolio manager at Bellevue Asset Management, remarked on Jorgensen’s successful leadership over the years.
Similarly, Danske Bank analyst Kirsten Lomborg Madsen expressed surprise at the board’s decision, highlighting the company’s typical patience with its strategies.
“I feel like there’s something quite wrong here,” he mentioned, reflecting a sentiment of uncertainty.
Jorgensen, who is 58, revealed in a TV2 interview that he was caught off guard by the dismissal and had only recently been informed about developments.
The success of Wegovy had propelled Novo to become the most valuable publicly listed company in Europe, valued at approximately $615 billion last June, though its current market value has dropped to around $300 billion.
Furthermore, Camilla Sylvest, who headed Novo’s commercial strategy and was aligned with Jorgensen, resigned last month without offering further details.
Lars Rebien Sorensen, a former CEO and current chairman of the Novo Nordisk Foundation, plans to join the board as an observer with intentions to take a formal seat at the next annual meeting. Notably, the Novo Nordisk Foundation controls the company through its investment entity, owning 77% of the voting shares.
