Wegovy maker’s share price halves amid rising pressure from Eli Lilly and compounded copycats
Novo Nordisk has removed its long-serving CEO, Lars Fruergaard Jørgensen, as the Danish pharmaceutical giant battles intensifying competition in the booming obesity drug market and faces a sharp erosion of investor confidence.
The surprise announcement on Friday sent Novo’s share price down another 3% and drew scepticism from analysts, some of whom questioned the timing and rationale behind the leadership shake-up. The company’s shares have plunged more than 50% since their June 2024 peak, wiping out over US$300bn in market value and leaving investors reeling.
Jørgensen, who has led the company since 2017 and worked there since 1991, will remain in place temporarily to support the leadership transition. The search for his successor is underway, with the company saying an announcement will be made “in due course.”
Strategic shift—or scapegoating?
Novo’s board and its controlling shareholder, the Novo Nordisk Foundation, framed the change as a response to recent market headwinds and the steep share price decline. “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,” the company said in a statement.
But the decision took even seasoned observers by surprise. Jørgensen himself told Danish broadcaster TV2 that he did not see it coming and had been informed only recently. Analysts were similarly blindsided, with Danske Bank’s Carsten Lonborg Madsen saying, “It just feels like there’s something that has gone pretty wrong here.”
From blockbuster to backlash
Jørgensen presided over Novo’s transformation into a global leader in diabetes and obesity treatment, with runaway sales of its GLP-1 drugs Ozempic and Wegovy. At its height in mid-2024, the company was Europe’s most valuable listed firm, worth over US$615bn.
But that momentum has faltered. Rival Eli Lilly’s obesity treatment, Zepbound, has overtaken Wegovy in US prescription volume since March. Compounding pharmacies in the US further undercut Novo’s growth by producing semaglutide copies while Wegovy was in shortage—though the FDA has since removed the shortage designation.
Novo recently cut its full-year sales growth forecast for the first time since Wegovy launched four years ago and reported disappointing first-quarter results. Its next-generation obesity drug candidate, CagriSema, also underwhelmed in trials, despite earlier optimism from Jørgensen.
Fallout and future direction
The leadership shake-up comes shortly after another senior executive, Camilla Sylvest—Novo’s head of commercial strategy—also stepped down. In parallel, Lars Rebien Sørensen, former CEO and current chair of the Novo Nordisk Foundation, will return to the company’s board, initially as an observer. He is expected to take a seat at the next annual general meeting.
Board chairman Helge Lund insisted the company’s strategy remains unchanged. “The Board is confident in the company’s current business plans and its ability to execute on the plans,” he said. But some analysts were unconvinced. “Replacing the CEO might feel good, but it doesn’t fix the strategic issues,” said BMO Capital Markets analyst Evan Seigerman.
Speculation has already begun about potential acquisitions or strategic pivots, with shares of Structure Therapeutics—developers of oral obesity drugs—spiking on investor bets that Novo’s next CEO may seek a bold move to regain momentum.
Jørgensen, who also serves as president of the European pharmaceutical lobby EFPIA, is expected to stay on until a new CEO is installed. Despite the turbulence, the company reaffirmed its forecast that sales may recover in the second half of 2025 as compounded drug availability fades.
But with Eli Lilly gaining ground and investor pressure mounting, Novo’s next chapter may depend less on legacy leadership—and more on whether it can innovate fast enough to keep its edge.
