Ozempic maker ousts CEO amid plunging share price as rival gains market share

Ozempic and Wegovy maker Novo Nordisk ousted CEO Lars Fruergaard Jorgensen on Friday over concerns the company is losing its first-mover advantage in the highly competitive obesity drug market.

Days earlier, the Danish pharmaceutical giant cut its sales and profit forecast for the first time since the launch of Wegovy four years ago, though Jorgensen had predicted a return to growth in its biggest market — the United States — in the second half of this year.

Novo’s chairman Helge Lund tried to reassure analysts and investors on a call that the company’s strategy was intact and the plan for executing it had not changed.

He told Reuters that discussions to replace Jorgensen had taken place over the past few weeks. 

Novo said earlier that Jorgensen will remain in his role until a successor is found.

Novo’s shares have plunged since hitting a record-high in June last year as competition, particularly from US rival Eli Lilly, makes inroads into its market share and as its pipeline of new drugs has failed to impress investors.

Eli Lilly has seen US prescriptions for its Zepbound obesity shot surpass Wegovy since mid-March in its biggest market.

Eli Lilly shares were up 2.6% after the news.

“The changes are made in light of the recent market challenges Novo Nordisk has been facing, and the development of the company’s share price since mid-2024,” Novo said in its statement.

Novo Nordisk’s share price fell on the news, trading 0.8% lower after being 4% higher earlier in the day.

The shares are down 32% year-to-date and 59% from their all-time high.

Under Jorgensen’s leadership, Novo Nordisk became a world leader in the weight-loss drug market, with sky-rocketing sales of its Wegovy and Ozempic treatments.

Analysts and investors were unconvinced of the need to replace him.

“He was leading the company for eight years and was in my opinion extremely successful,” Lukas Leu, a portfolio manager at Bellevue Asset Management, told Reuters.

Danske Bank analyst Carsten Lonborg Madsen was similarly caught off guard.

“The way we know Novo Nordisk is that normally you have patience when you’re on the right track, and then you let things move in the right direction once you have the strategy right,” he said.

“It just feels like there’s something that has gone pretty wrong here,” he said on the call.

Jorgensen, at 58, has been CEO since 2017.

He said in an interview with Danish broadcaster TV2 that he did not see the decision coming, and was only informed very recently.

Booming sales of Wegovy helped make Novo the most valuable listed company in Europe, worth $615 billion at its peak in June last year, but its market value has halved to about $310 billion.

Camilla Sylvest, Novo’s head of commercial strategy and corporate affairs and a consistent presence alongside CEO Jorgensen, stepped down last month without citing a reason.

Former CEO of Novo Nordisk for 16 years and current chair of the Novo Nordisk Foundation, Lars Rebien Sorensen, will join the board as an observer with immediate effect with the aim of taking a seat at the next annual general meeting, Novo said.

The company is controlled by the Novo Nordisk Foundation through its investment arm which owns 77% of the voting shares.