Danish pharmaceutical company Novo Nordisk A/S, known for its blockbuster weight loss drug Wegovy, announced on Friday that its CEO, Lars Fruergaard Jorgensen, will step down by “mutual agreement” with the board of directors, citing “recent market challenges” and a significant drop in the company’s share price. Jorgensen’s departure comes shortly after the company revised its sales and profit projections, following a more than 50% decline in its stock value since mid-2024.
Novo Nordisk’s shares had soared after the release of Wegovy and diabetes drug Ozempic, both containing the same key ingredient, semaglutide. At their peak, the company’s market value exceeded Denmark’s entire annual GDP, making it Europe’s most valuable company, though that position has now been overtaken by software firm SAP.
In a statement, the company explained that Wegovy sales in the U.S. were impacted by cheaper versions of the drug being produced by compounding pharmacies using the active ingredient from patented drugs during shortages. However, the U.S. Food and Drug Administration (FDA) has indicated that the shortage issues have been resolved, and these replica drugs will no longer be available in the near future.
Wegovy and similar weight loss drugs, including Novo’s Saxenda, are part of a growing class of medications called GLP-1 receptor agonists, which have become increasingly popular for their effectiveness in promoting weight loss. On Sunday, a study in the New England Journal of Medicine showed that Eli Lilly’s competitor drug, Zepbound, led to greater weight loss compared to Wegovy. The study was funded by Lilly, and Novo’s stock price has dropped 54% from its peak in June 2024, with further declines seen in early Friday trading.
Novo Nordisk expressed appreciation for Jorgensen’s leadership during his eight years as CEO, highlighting his role in driving the company’s “significant growth and transformation.” Despite his departure, Jorgensen will continue in his role temporarily to ensure a smooth transition. The company stated that the decision to initiate a CEO change was made in light of recent market challenges and the drop in share prices since mid-2024, in the best interest of the company and its shareholders.
