When Lars Fruergaard Jørgensen came down the grand circular staircase at Novo Nordisk’s headquarters last week, employees gathered to give the drugmaker’s ousted chief executive a standing ovation.
The Danish company’s controlling shareholder, the Novo Nordisk Foundation, had pushed him to step down after the share price fell more than 50 per cent in a year, and its bestselling obesity and diabetes drugs Wegovy and Ozempic lost ground to US rival Eli Lilly.
But for many employees, Jørgensen’s understated approach embodies corporate values that prize openness and a long-term view.
Now, Novo Nordisk’s board, led by chair Helge Lund, and Lars Rebien Sørensen, the former Novo Nordisk CEO and now chair of the Foundation, will have to find a replacement who can spearhead a battle against Lilly and other rivals, while not abandoning the company’s prized culture.
One headhunter summed up the dilemma, saying Novo Nordisk was “in essence an old-fashioned, slow-moving Danish diabetes powerhouse that has become a ‘sexy’ lifestyle company”.
The unceremonious ousting of Jørgensen, with a press release blaming him for the share price decline, was unusual for a company where chief executives have traditionally had smooth transitions after long tenures.
The Foundation, though it owns shares representing 77 per cent of the votes and controls the election of new Novo Nordisk board members, has rarely intervened in this way in the past.
Mikael Bak, chief executive of the Danish Shareholders Association, which represents retail investors, questioned the sequence of events. “If they had done the right thing governance-wise, they would maybe have taken out the chair and then changed the chief executive. But it could be that the problems were so big that they needed changes very quickly,” he said.
Jørgensen publicly expressed surprise that he had been pushed out. One person close to him said he was “super frustrated” with the situation, and would have preferred an orderly transition within the year. For now, he is staying as a caretaker chief executive, while the board searches for a replacement.
Bak said the new chief would need to “put [their] shoulders back and get into the fight” with rivals. “We have been looking for a more sales-orientated, offensive-minded [candidate] and a good communicator,” he said.
He added that Novo Nordisk had only ever had Danish chief executives and raised the question of whether the company would look at appointing Maziar Mike Doustdar, the head of its international operations. He is an Austrian-Iranian national who is a Novo Nordisk lifer and runs every market apart from the US. “An international profile that can secure the leadership position in the US is very important,” Bak said.
One person with knowledge of the board’s thinking has said Novo Nordisk is looking for a CEO with “commercial nous”, who can bring better judgment about the US market, even if the strategy does not change dramatically.
But Kurt Jacobsen, a Copenhagen Business School professor who has written a history of Novo Nordisk, said there was a “danger” that an outsider would have a culture clash with the company. “Simply taking a very aggressive, sales-orientated American manager into a culture like this . . . could be a very serious matter,” he said.
Novo Nordisk declined to comment.
In the interim, Sørensen, who is joining the board as an observer but will stand for election to it next year, brings 16 years of experience running the company. Jo Walton, an analyst at UBS, noted that Novo Nordisk had already had to compete against Lilly and Sanofi on insulin. “He certainly understands price wars, if price wars are what it boils down to,” she said.
There are already tentative signs of a change in approach. Last week, Novo Nordisk launched a special $199 offer in the US for new obesity drug customers, compared with $499 through its direct-to-patient prescription service NovoCare, or a US list price of $1,000 to $1,300.
Walton said the new chief executive would need to have “very strong commercial experience” because a key challenge was to stop Novo Nordisk from losing market share in the US.
The new leadership would also need the research and development expertise to boost Novo Nordisk’s pipeline of new drugs, she added. Late stage trial results for its next generation obesity drug CagriSema have been disappointing and investors now believe Lilly has the stronger pipeline.
Walton noted that the leadership team would also need good relationships to negotiate the political situation in the US: an executive order signed by President Donald Trump this month included plans to force drug companies to cut prices.
But others worry about how the board will find a candidate with all the relevant experience who can make changes while preserving the company’s culture, and who will also be content with being less powerful and well paid than US peers.
Many US pharma companies, including Lilly and Pfizer, are run by chief executives who also chair their boards. But at Novo Nordisk, the chief executive does not even sit on the board. On the question of pay, in 2024 Jørgensen was paid about $8mn, compared with about $29mn for Lilly’s chief executive David Ricks.
Martin Jers Iversen, an associate professor of strategy and innovation at Copenhagen Business School, said the new CEO “needs to be able to bridge things that are not easy to bridge”.
“On the one hand, there is a very delicate, commercial, scientific, regulatory set-up in the US, which is not easy at all, and a lot of decisions to make there,” he said. “And on the other hand, there is a company that has a very profound, deep corporate culture with so many strengths.”
This dilemma has led some to float the names of internal candidates with outside experience, such as the recently appointed head of US David Moore, who has a background in US pharma including at Johnson & Johnson. Another name that has been mentioned is Jakob Riis, who was previously an executive vice-president in the US for Novo Nordisk but now runs Danish healthcare company Falck.
Walton said Novo Nordisk should certainly look at external options, including at Lilly, even if its current pay packages did not look large enough to lure a big name US executive.
“Pay might well limit their choices. All of these things could be negotiable, and if the Foundation really wants the very best person and he or she is more expensive, it is a drop in the ocean [for a company] the size of Novo,” said Walton.
