Pre-market plunge of 6%! Novo Nordisk CEO suddenly resigns, admits to facing intense market challenges

On Friday, Novo Nordisk announced that CEO Lars Fruergaard Jorgensen will resign due to concerns that the company is losing its first-mover advantage in the highly competitive obesity drug market. Novo Nordisk stated in a press release:

"In light of the recent market challenges faced by Novo Nordisk and the company's stock performance since mid-2024, the company has made this change."

Under Jorgensen's leadership, Novo Nordisk became the leader in the global obesity drug market with soaring sales of its weight loss drugs Wegovy and Ozempic, and its stock price also climbed, making it the highest-valued publicly traded company in Europe at one point.

However, since reaching an all-time high in June last year, the company's stock price has fallen 59% from that peak. The main reason is that competitors like Eli Lilly are eating into its market share, while its next-generation injection CagriSema has underperformed in clinical trial results.

In pre-market trading, Novo Nordisk's stock price fell nearly 6%. The company has dropped 32% so far this year.

CEO Resignation Acknowledges Intense Market Challenges

58-year-old Jorgensen has served as CEO since 2017 and will continue in the role until a new CEO is appointed.

Lars Rebien Sorensen, who served as CEO of Novo Nordisk for 16 years and is currently the chairman of the Novo Nordisk Foundation, will immediately join the board as an observer, aiming to secure a seat at the next annual shareholder meeting.

Novo Nordisk is controlled by the Novo Nordisk Foundation through its investment arm, which holds 77% of the voting shares. The company stated:

"Given the recent market challenges, the decline in stock price, and the wishes of the Novo Nordisk Foundation, the board of Novo Nordisk and Lars Fruergaard Jorgensen have jointly concluded that initiating the CEO succession process is in the best interests of the company and its shareholders."

The company is facing the dilemma of insufficient competitiveness of its flagship weight loss product. Data shows that in Novo Nordisk's most important U.S. market, since mid-March, prescriptions for Eli Lilly's weight loss injection Zepbound have surpassed those for Wegovy.

Last week, Novo Nordisk's first-quarter sales were 78.1 billion Danish kroner, below the expected 78.7 billion Danish kroner, and sales of the flagship weight loss drug Wegovy also fell short of expectations The company has also lowered its full-year sales forecast calculated at constant exchange rates. The previous expected sales growth of 16% to 24% has now been adjusted to 13% to 21%. At the same time, the operating profit expectation has been revised down from the previous 19% to 27% to 16% to 24%