Danish pharmaceutical company Novo Nordisk announced on Friday that CEO Lars Fruergaard Jorgensen will step down following a significant decline in the company’s stock and intensifying competition in the obesity and diabetes drug markets.
Jorgensen, who has served as CEO since 2017, will remain in his position until a successor is appointed to ensure a smooth leadership transition.
The decision comes as Novo Nordisk faces growing pressure from rivals, most notably US-based Eli Lilly. Both companies compete in the fast-expanding market for GLP-1-based treatments for diabetes and obesity. Novo Nordisk’s leading products, Ozempic and Wegovy, are now contending with Eli Lilly’s Mounjaro and Zepbound, which target additional hormone pathways and have demonstrated greater weight-loss efficacy in some studies.
Novo Nordisk’s board acknowledged Jorgensen’s achievements over his eight-year tenure, during which the company’s sales, profits, and stock value nearly tripled. However, recent challenges—including a more than 50% drop in share price since its peak in June 2024 and missed sales targets—prompted the leadership change. On Friday, shares fell 4% to $63.53 following the announcement.
“Considering the recent market challenges, the share price decline, and the wish from the Novo Nordisk Foundation, the Board and Lars Fruergaard Jorgensen have jointly concluded that initiating a CEO succession is in the best interest of the company and its shareholders,” Novo said in a statement.
Once valued at over $600 billion, Novo Nordisk’s market capitalization has declined by nearly half in under a year. The company recently lowered its earnings guidance for the first time since Wegovy’s launch in 2021, citing rising competition and investor concerns over its future growth prospects.
Jorgensen’s departure surprised many analysts and investors who viewed his tenure as highly successful. Some questioned the timing of the move, especially as the company had expressed confidence in recovering growth in the latter half of 2025.
“It just feels like there’s something that has gone pretty wrong here,” said Danske Bank analyst Carsten Lonborg Madsen.
Novo Nordisk faces mounting competition beyond Eli Lilly, with several pharmaceutical firms—including Amgen, Viking Therapeutics, and Roche—actively developing or trialing new weight-loss drugs. Market analysts project the obesity drug market could grow to as much as $144 billion by 2030, compared to just $6 billion in branded obesity drug sales in 2023.
To aid in leadership continuity, the company also announced that Lars Rebien Sorensen, former CEO of Novo Nordisk and current chair of the Novo Nordisk Foundation, will join the board as an observer, with plans to take a seat at the next general meeting.
FOX Business, Reuters, and Investor’s Business Daily contributed to this report.
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