The logos of Danish drugmaker Novo Nordisk, maker of the blockbuster diabetes and weight-loss therapies Ozempic and Wegovy is pictured as the corporate introduced the annual report at Novo Nordisk in Bagsvaerd, Denmark, on February 5, 2025. (Photograph by MADS CLAUS RASMUSSEN/Ritzau Scanpix/AFP by way of Getty Photos)
Mads Claus Rasmussen | Afp | Getty Photos
A management shakeup at what was as soon as Europe’s most beneficial firm was cemented Friday as Novo Nordisk’s controlling shareholder tightened it is grip on the weight-loss drugmaker, at the same time as minority shareholders specific discontent.
Novo has discovered itself in an more and more chaotic state of affairs as of late, with shares plunging and investor confidence waning, as its position because the main participant within the extremely profitable weight-loss house is being referred to as into query.
The maker of diabetes and weight-loss medication changed its impartial board members, together with Chair Helge Lund, after it turned unattainable to succeed in an settlement between the views of the present board and the Novo Nordisk basis board — the corporate’s majority shareholder. The intention to interchange the members had been introduced on Oct. 21.
Lund is changed by firm veteran Lars Rebien Sørensen, already chair of the Basis board. The 71-year-old additionally served as Novo Nordisk CEO between 2000 and 2016. Cees de Jong was elected vice chair and Britt Meelby Jensen and Stephan Engels elected members.
Shareholders authorised the adjustments with 93% voting in favor. The muse controls over 75% of votes.
Mikael Dolsten, previously head of R&D at Pfizer, determined to withdraw his candidacy forward of the assembly, as a result of what Sørensen stated was “a state of affairs referring to his former employer.” Novo was till just lately caught up in a bidding warfare with Pfizer over smaller biotech Metsera.
Norges Financial institution Funding Administration (NBIM), one of many bigger minority shareholders, stated earlier this week it could abstain from voting at Friday’s EGM, indicating discontent. Different shareholders, corresponding to California State Academics’ Retirement System, additionally stated they supposed to vote in opposition to the proposal. NBIM and CalSTRS each declined to remark additional.
Sørensen acknowledged Friday that some shareholders — together with influential ones — have indicated discontent due to trespassing of the governance guidelines, however flagged the intention of getting again to a “regular state of affairs” as quickly as doable.
“I’ll enter the board with an intention of holding this place for a interval of two to 3 years,” Sørensen stated. “My mandate could be very clear; I’ve two vital duties along with the board, first to assist the CEO and the administration in its transformation plans to regain its aggressive, management, and second, making ready the way in which for my successor.”
Novo shares had been down 3.2% to $308.25 in noon buying and selling.
“It’s uncommon that an organization of that scale to make that diploma of change that rapidly,” Andrew Pettigrew, Emeritus professor at College of Oxford, and an professional of theories of change, instructed CNBC.
“It is often precipitated by some terrible disaster, which is throwing them off a cliff, however most likely additionally a interval once they had been blind to what was occurring beneath them. In different phrases, they had been shocked by a sudden change, and it often takes that to overthrow an current energy group in an organization, particularly if they have been in energy for a very long time,” Pettigrew added.
The present board was “too gradual in recognizing the importance of the market adjustments in america,” Sørensen instructed analysts throughout a name in October.
Novo is broadly seen as having fallen behind U.S. peer Eli Lilly which has quickly taken market share from Novo, as its rival medication Mounjaro and Zepbound have proven extra pronounced weight reduction on the highest dose.
“It is a matter of urgency and scope,” Sørensen stated in October in regards to the proposed adjustments to the board, nevertheless additionally saying the inspiration is “totally aligned” behind Novo’s present technique beneath new CEO Mike Doustdar.
Outgoing Chair Lund stated Friday that the differing views had been about governance ideas, together with “clear and collaborative resolution making and acceptable checks and balances.”
The outgoing board members, Lund stated, believed that the way in which these ideas had been beforehand utilized needs to be maintained and “this could have been totally in line with each the implementation of the required adjustments and with previous follow.”
“In our view, it could even have decreased pointless unfavourable public consideration throughout a yr already marked by advanced market challenges,” Lund added.
A difficult U.S. market
One other rationale for the board cull is {that a} new configuration would convey in additional folks with direct expertise from a U.S. shopper perspective to assist navigate the difficult market. It comes amid rising competitors each from Eli Lilly and so-called compounding pharmacies that make cheaper copycat model of the medication, and a shift in direction of direct-to-consumer gross sales.
Like for a lot of pharmaceutical corporations, the U.S. is Novo’s largest market. Within the first 9 months of 2025, the U.S. market accounted for 56% of whole gross sales, measured in Danish kroner.
Analysts, nevertheless, have expressed scepticism that the brand new board will convey within the supposed expertise. “On steadiness, it may appear the brand new board really possesses much less quite than extra industrial, massive pharma experience,” Deutsche Financial institution analyst Emmanuel Papadakis stated.
Novo shares have fallen 12% because the board shakeup was introduced and have misplaced 58% because the begin of this yr. Final week, the corporate reported third-quarter outcomes that missed estimates, and lowered the higher vary of its full-year steering citing slower development expectations for Ozempic and Wegovy.
It is however considered one of many dramatic happenings happening on the Danish pharma large recently.
“There have been so many strikes this yr that present Novo as a conflicted firm,” famous Morningstar analyst Karen Andersen. “With such a brand new direct-to-patient market rising as a crucial piece of future weight problems drug gross sales development, and compounders remaining an actual competitor available in the market, it isn’t laborious to think about that the boards and administration may not have the identical imaginative and prescient for a way Novo ought to reply,” she added.
Over the weekend, Novo pulled out from a dramatic bidding warfare in opposition to U.S. large Pfizer over an experimental weight-loss drug by clinical-stage biotech Metsera, stepping away from a deal analysts have described as uncommon.
The board adjustments come simply months after Novo appointed Doustdar as chief government, booting former CEO Lars Fruergaard Jørgensen, partly blaming him for the present trajectory of the corporate and its shares. Doustdar has since introduced a reorganisation, together with shedding over 10% of workers globally.
