Novo Nordisk, the company that makes Wegovy and Ozempic, is abruptly ousting its chief executive over concerns the firm is losing ground in the popular weight-loss drug market.
The firm’s market value has dropped by roughly half over the last year, as alternatives from competitors such as Eli Lilly gain traction.
Lars Fruergaard Jørgensen has led the company since 2017, overseeing its rise to become the most valuable company in Europe after the launch of its flagship anti-obesity drugs.
He will stay in the role until a successor is appointed.
The company said its controlling shareholder, the Novo Nordisk Foundation, had started talks about replacing Mr Jørgensen in recent weeks as a result of “market challenges” and the slide in its share price.
“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 chief executive succession is in the best interest of the company and its shareholders,” the company said in a statement.
As part of the changes, the firm said that its former chief executive, Lars Rebien Sørensen, who now leads the Novo Nordisk Foundation, will also take on a greater role on the firm’s board.
Mr Jørgensen started at the company in 1991. In an interview with Danish broadcaster TV2, he said that he had not seen the decision coming, according to Reuters.
The move also caught many analysts off-guard.
On a conference call with board chair Helge Lund, they pressed him on whether there were other factors behind the decision and whether it indicated a lack of confidence in the firm’s strategy.
“Share price decline is not exactly something he can control so I was wondering if you can give some more detail on what exactly has driven this change right now,” said Danske Bank analyst Carsten Lonborg Madsen, noting that the company had had only a handful leaders since its start.
“This is something that has been going on since mid 2024,” he said, referring to the slide in share price value. “It just feels like there’s something that has gone pretty wrong here.”
“I’m sorry to belabour the point but I have to say that I’m confused by the discussion,” Seamus Fernandez of Guggenheim Securities said later. “If I were the next potential chief executive I would be very nervous to take the role.”
Mr Lund acknowledged that the decision might look abrupt, noting that up until now it had been anticipating a slower succession timeline.
He said the firm would make an announcement of a new leader “in due course” and it did not signal a change in the its strategy or plans.
“There is nothing more behind this,” he said.
Shares in the firm fell further after the announcement.
Since 2021, Novo Nordisk has more than doubled its sales. But growth has been slowing.
Last year, sales rose 25% to more than 290m Danish kroner, while profits were up roughly 20%.
The company earlier this month predicted sales growth between 13% and 21%, with growth in operating profit between 16% to 24%.
