Novo Nordisk CEO To Step Down Following Brutal Bear Market

Novo Nordisk announced a surprise leadership shake-up, with CEO Lars Fruergaard Jørgensen stepping down by mutual agreement with the Board. The move comes amid a sharp downturn in the company’s stock in European markets, which has lost half its value over the past year, marking the steepest decline in Novo’s history as a public company. The leadership change follows investor concerns over the future of its anti-obesity drug pipeline and competition from compounding pharmacies eroding demand for Wegovy.

“A search for Lars Fruergaard Jørgensen’s successor is ongoing, and an announcement will be made in due course,” Novo wrote in a press release, adding, “In connection with the change, Lars Rebien Sørensen, chair of the Novo Nordisk Foundation, will join the Novo Nordisk Board, initially as an observer.”

Novo praised Jørgensen’s eight years at the helm but noted “recent market challenges Novo Nordisk has been facing, and the development of the company’s share price since mid-2024.”

It appears the collapse in share price is what prompted the company to search for a new CEO:

In light of this, the Novo Nordisk Foundation Board initiated a dialogue with the Novo Nordisk Board on the merits of an accelerated CEO succession and expressed a wish to increase its representation on the Novo Nordisk Board.

Since mid-2024, Novo shares in Copenhagen have plunged 58%, the steepest bear market ever for the publicly traded company, according to trading data from 1990. 

Much of the decline is based on investor concern about the company’s ability to compete in the weight-loss market because of the emergence of compounding pharmacies. Plus, the drugmaker’s next-generation shot CagriSema has underwhelmed in clinical trial results.

Last week, Novo slashed its full-year guidance because compounded anti-obesity drugs flooded the market. However, Novo pointed to an inflection point in the second half of this year as it plans to crack down on copycat obesity drugs. 

We await Goldman’s James Quigley—Novo bull—to weigh in on the leadership shake-up. 

The question becomes whether leadership change is enough to reverse the bear market.