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Novo Nordisk has ousted chief executive Lars Fruergaard Jørgensen, as the maker of pioneering obesity drug Ozempic battles a slump in profit growth, declining market share and a plunging stock price.
Shares in the drugmaker have fallen more than 50 per cent in the past 12 months, causing it to lose its crown as Europe’s largest listed company by market capitalisation after peaking at $650bn last year.
Investors are concerned that its obesity and diabetes drugs are losing ground to US rival Eli Lilly, and have been disappointed by trial results from next-generation medicines in its pipeline.
“Considering the recent market challenges, the share price decline and the wish from the Novo Nordisk Foundation, the Novo Nordisk board and Lars Fruergaard Jørgensen have jointly concluded that initiating a CEO succession is in the best interest of the company and its shareholders,” Novo said.
Last week, the company cut sales and profit forecasts for the year, blaming the rapid expansion of replica drugs in the US. These cheaper alternatives — sold by so-called compounding pharmacies — were temporarily allowed when there was a shortage of the drugs.
Novo said sales growth for this year was now expected to be 13 to 21 per cent at constant exchange rates, compared with earlier guidance of 16 to 24 per cent. It forecast operating profit growth of 16 to 24 per cent, compared with a previous range of 19 to 27 per cent.
Jørgensen has led the drugmaker for eight years, during which time the share price has tripled as it capitalised on excitement over the first wave of effective obesity drugs, with its Wegovy and Ozempic products.
In its statement on Friday, Novo noted concern about the company’s share price “since mid-2024”. Shares fell 21 per cent in one day in late December when the company announced that its follow-up obesity drug CagriSema had missed its target in a late-stage clinical trial.
Novo said it would make an announcement about its search for a new chief executive “in due course”. Jørgensen would continue in his role for a period to ensure a smooth transition, it added.
The Novo Nordisk Foundation, which is the majority owner of the company through Novo Holdings, is increasing its representation on the board. Lars Rebien Sørensen, the foundation’s chair, will begin to participate in board meetings immediately.
Jørgensen said he was “proud of the results” he had produced at the company along with colleagues “who work every day to drive change to defeat serious chronic diseases”.
Shares in Novo fell following the announcement, trading 4.4 per cent lower.
Helge Lund, Novo’s chair, is also the chair of UK oil major BP, which is facing immense activist pressure from US hedge fund Elliott Management.
