Novo Nordisk CEO steps down amid falling profits and market share

Novo Nordisk Ousts CEO as It Grapples with Falling Profits and Market Pressure

Lars Fruergaard Jørgensen to step down amid leadership shift at obesity drug giant

Novo Nordisk has announced the departure of its chief executive, Lars Fruergaard Jørgensen, marking a dramatic leadership change as the Danish pharmaceutical giant navigates weakening profits, increased competition, and a sharp stock price decline.

The move comes after the company’s shares lost over 50% of their value in the past year, following concerns about slowing growth in its flagship obesity and diabetes drug lines, most notably Ozempic and Wegovy. The company, which had briefly held the title of Europe’s most valuable listed firm with a peak market cap of $650 billion, has since slipped amid investor unease.

Competitive pressure and disappointing trials

Novo Nordisk is facing growing pressure from US rival Eli Lilly, which has gained traction with newer weight-loss treatments. Compounding this challenge, recent late-stage trial results for Novo’s follow-up obesity drug CagriSema failed to meet expectations, sparking a 21% one-day stock drop in December.

Sources familiar with the decision said the leadership shake-up was driven by a combination of market challenges and pressure from the Novo Nordisk Foundation, the company’s majority shareholder. In a company statement, Novo said the board and Jørgensen “jointly concluded” that it was time for a CEO succession to serve the best interests of shareholders.

Falling guidance and market share concerns

Just last week, Novo revised its annual sales growth forecast to 13–21%, down from a previous estimate of 16–24%. Its operating profit forecast was also cut to a 16–24% range from 19–27%. The company attributed the downgrade to growing use of compounded, lower-cost replica drugs in the US, which surged during a shortage of branded products.

Though many of these compounders are now restricted by a recent regulatory ban, it remains unclear how many patients will return to using Novo’s products. Some compounders are continuing to offer variations of the medications they claim still fall within legal limits, further muddying Novo’s competitive outlook.

Jørgensen reflects on exit and tenure

In an interview with the Financial Times, Jørgensen said he was surprised by the request to step down but respected the decision. He emphasized that while hindsight may reveal missteps, he did not regret his strategic choices during his eight-year tenure.

Under his leadership, Novo’s share price had tripled prior to the recent downturn, propelled by the massive commercial success of its GLP-1 weight-loss drugs. Jørgensen noted the natural ebb and flow of market dynamics, especially in the face of new competition.

“We have a 100-year history of competing with Lilly,” he said. “I feel that we have strong ability to keep competing successfully.”

Market response and succession plan

Shares in Novo fell 4.4% following the announcement of the leadership change. While some investors welcomed the prospect of new leadership, others viewed the timing as harsh given Jørgensen’s previous accomplishments. One analyst described the CEO’s departure as “brutal,” given his role in launching one of the most commercially successful drug portfolios in recent history.

Still, others noted the need for “a new pair of eyes,” particularly after recent “missteps” in managing investor expectations, including a lack of transparency about trial designs.

Novo said Jørgensen will remain in his role temporarily to ensure a smooth transition, and that details about his successor will be disclosed “in due course.” The Novo Nordisk Foundation is also strengthening its board presence, with its chair Lars Rebien Sørensen set to begin participating in board meetings immediately.

Looking ahead in a shifting landscape

Novo Nordisk’s next chapter will be defined by its ability to maintain leadership in a rapidly evolving obesity and diabetes treatment market. While its pioneering GLP-1 drugs revolutionized the sector, its long-term dominance is now under scrutiny.

As Jørgensen steps aside, the company must recalibrate its pipeline strategy, navigate regulatory shifts, and respond to aggressive competition — all while restoring investor confidence.

Stay tuned to The Horizons Times for continuing coverage on leadership transitions and strategy shifts in the global pharmaceutical industry.