Danish drugmaker Novo Nordisk announced Friday that CEO Lars Fruergaard Jørgensen will step down, marking a significant leadership shakeup as the company navigates increasing pressure in the competitive obesity drug market.
In a company statement, Novo Nordisk said Jørgensen will remain in his role temporarily to ensure a “smooth transition” while a search for his successor is underway. “An announcement will be made in due course,” the company added.
As news of the CEO’s exit broke, Novo Nordisk shares slipped 3%, while shares of US rival Eli Lilly, the maker of competing weight loss drug Zepbound, rose 1.6% in premarket trading.
Share price tumbles over 50% since mid-2024
The leadership change follows a steep decline in Novo Nordisk’s stock price—down over 50% since mid-2024—amid rising competition and clinical setbacks. Although the company emphasized that its overall strategy remains intact, Chairman Helge Lund acknowledged that “recent market challenges and share price developments” had prompted the leadership review.
To reinforce governance during the transition, Lars Rebien Sørensen, chair of the Novo Nordisk Foundation, will join the company’s board as an observer.
Wegovy sales miss and forecast cut
Just last week, Novo Nordisk reported weaker-than-expected first-quarter sales for its flagship obesity drug Wegovy. The company also cut its full-year sales growth forecast, citing headwinds from U.S.-based compounded versions of obesity drugs that have been cutting into its market share.
“Compounders took a part of our business away,” Jørgensen admitted in a CNBC interview.
However, the company expressed optimism that sales will rebound in the second half of the year as the FDA phases out its drug shortage ruling, which had allowed the production of copycat weight loss drugs.
Disappointment in CagriSema trial results
Another challenge for Novo Nordisk has been disappointing trial results for CagriSema, its next-generation obesity treatment. Despite the setbacks, Jørgensen had remained publicly confident in the drug’s potential. “From the data we have, CagriSema is the best product that has been tested or is on the market,” he said.