LONDON (Reuters) – Wegovy-maker Novo Nordisk said on Friday its CEO Lars Fruergaard Jorgensen will step down over concerns the company is losing its first-mover advantage in the highly competitive obesity drug market.
Here are reactions to the news from analysts and investors in alphabetical order by company name:
BARCLAYS ANALYST EMILY FIELD on an external CEO
It is “really not the way the company’s ever done things, so that would be a huge departure from what they’ve done, that would be a big surprise to people … They need someone who understands the U.S. system better because they have not competed to the same degree that (Eli) Lilly has. Lilly is taking more and more, so it definitely feels like (Novo) is at a competitive disadvantage.”
LUKAS LEU, PORTFOLIO MANAGER AT BELLEVUE ASSET MANAGEMENT, WHICH OWNS NOVO SHARES
“Seems like he’s been made redundant. He was leading the company for eight years and in my opinion that was extremely successful… Stock has been weak since mid-2024. That is unexpected and not too good.”
BERENBERG ANALYST, KERRY HOLFORD
“Several big European pharma companies have U.S. chiefs now … I think they should consider this.”
Holford said it “is a key unanswered question” whether Novo is confident about its pipeline. When asked (on the analyst call) about confidence in (its) CagriSema (drug candidate), Novo avoided the question, Holford said.
BMO CAPITAL MARKETS ANALYST EVAN SEIGERMAN
“With Novo shares declining about 55% in the past one-year alone, we are not surprised by the larger pressure prompting this CEO transition, but are left less clear on how a new CEO will be able to address these challenges.”
Seigerman said a CEO transition might satisfy some investors, but without a meaningful change in its near-term strategy, the company’s path forward seems difficult.
DANSKE BANK ANALYST CARSTEN LONBORG MADSEN
“The way we know Novo Nordisk is that normally you have patience when you’re on the right track, and then you let things move in the right direction once you have the strategy right. It just feels like there’s something that has gone pretty wrong here.”
DANSK AKTIONAERFORENING
The Danish Shareholders Association said the CEO departure was a surprise. “This is the first time since 1960 that a CEO at Novo Nordisk has left their position in such a manner to make way for a new candidate.”
Mikael Bak, Chief Executive of Dansk Aktionaerforening, said that at Novo’s latest annual general meeting, the association expressed both praise and criticism.
Bak said while “Fruergaard has done a fantastic job, we have also called for a more aggressive approach in communication and competition with rivals like Eli Lilly.”
“After nine months of turbulence, during which the stock has fallen and the company has faced regulatory, political, and media challenges, it is essential that the board has a clear plan for the future.”
ED EGILINSKY, A MANAGING DIRECTOR AT DIREXION
“Novo is making a change in leadership as they feel they are falling behind in the R&D race with Lilly when it comes to the effectiveness of their weight loss drugs … This leadership change opens the door for competitor Eli Lilly to take additional market share and win over investors.”
GOLDMAN SACHS
“Obviously not great at first look, some early feedback pointing to the company acknowledging performance has not been acceptable and change was needed, but will also call into question the inflection in scripts (prescriptions) if and when that comes.”
GUGGENHEIM ANALYST SEAMUS FERNANDEZ
“This announcement … will only intensify questions around Novo’s strategic market position vs. Lilly and may even escalate concerns over new competitors poised to emerge in 2028-2030.”
JP MORGAN
“While the announcement of the CEO transition is unexpected, we believe this reflects decisive action from the Novo Nordisk Foundation to put Novo in the strongest position to capitalise on the GLP-1 (obesity/diabetes) market opportunity over the next 10 years.”
JYSKE BANK ANALYST HENRIK HALLENGREEN LAUSTSEN
“These are uncertainties that the Novo share does not need in the current situation. On the face of it, a negative price reaction makes sense, despite the recent challenges for Novo… They don’t need more uncertainty, they need a firm grip on the wheel.
“The Novo Nordisk Foundation is increasing its influence and has appointed its chairman, Lars Rebien Sørensen, as an observer on the Novo Nordisk Board of Directors for election in 2026. The changes are without any changes to the company’s strategy, according to Chairman Helge Lund.”
NOVO SHAREHOLDER MARKUS MANNS, PORTFOLIO MANAGER AT MUTUAL FUNDS FIRM UNION INVESTMENT
“It is a sign, that Novo’s problems are deeper than just cheap Sema (semaglutide) from the compounders. This increases investors’ concerns and the recovery in Scripts (prescriptions) and Sales becomes more uncertain.”
UBS ANALYST TRUNG HUYNH
“Timing of a CEO leaving will always raise questions, especially how performance of the company is doing … I think people forget that Lars has seen a period of amazing growth and progress especially in obesity. I don’t think there’s indication that leaving is related to pipeline.”
On looking for a new CEO, Huynh said: “I think they need someone who can do a better job of understanding the U.S. system.”
CHIEF INVESTMENT OFFICER AT TEMA ETFS YURI KHODJAMIRIAN
“This is a clear acknowledgement from Novo Nordisk that they need to improve their competitive positioning vs. fierce rival Eli Lilly… Lilly has more experience doing large scale primary care launches in the U.S.”
“Novo’s initial success was extending servicing specialists which can only go so far. This is most clearly seen in the oral GLP-1 space where Lilly is well ahead with orfoglipron vs. Novo Nordisk having to scramble to do a deal this week held back by its historic bias to injectables.”
Khodjamirian said Novo’s recent partnerships with Hims & Hers and the CVS formulary change were defensive moves.
(Reporting by Maggie Fick in London, Stine Jacobsen in Copenhagen and Reuters buros; Compiled by Josephine Mason, Izabela Niemiec; Editing by Kirsten Donovan, Susan Fenton and Jane Merriman)
Add Comment