Novo Nordisk, under new CEO Maziar Mike Doustdar, has a new attitude. It’s making Pfizer livid.
Novo Nordisk was never the flashiest of companies but suddenly, under new leadership, it has become a Big Pharma villian.
Yesterday, the Danish pharma made an unsolicited rival bid for Metsera, the obesity biotech that emerged just 17 months ago with a clutch of next generation obesity and metabolic medicines. The biotech quickly made a name for itself with positive readouts for lead candidate MET-233i. The long acting, injectable amylin asset showed weight loss of 8.4% at 36 days in a Phase I readout from June.
Pfizer, which had tried and failed to develop an internal obesity pipeline, beat out at least two other suitors to acquire the biotech last month, paying nearly $5 billion. The deal seemed on its way to closure before Novo stepped in.
We now know for sure that Novo was one of the original companies bidding for Metsera. The regulatory risks and a likely long closing term, however, scared the Metsera team off. Ultimately, Pfizer won the competitive process.
But Novo has something to prove right now. The company began to rise in prominence several years ago along with the semaglutide franchise, quickly becoming one of the most powerful in pharma. Wegovy and Ozempic have brought in billions.
Then, just as quickly, the tide turned. Revenue from the semaglutide franchise began to stall. Prescriptions for Eli Lilly’s rival medicines jumped. Compounding pharmacies zeroed in on the drug and stole market share with copycat versions. The world was no longer Novo’s.
On his back foot, CEO Lars Fruergaard Jørgensen tried to stem the bleeding with sharp words about the illegality of the compounders. It didn’t matter. Every time a compounder was taken out, another popped up like whack-a-mole. The marketing machine that is Lilly cruised higher.
Analysts were clamoring for change and they got it. Earlier this year, Jørgensen was suddenly ousted and replaced over the summer by Maziar Mike Doustdar, former executive vice president of international operations.
Doustdar got to work quickly, slashing headcount—sending 9,000 employees packing—and striking a more defiant tone. “I think I’ve been put into this position because I execute and I outcompete my competition,” he said on Novo’s second-quarter earnings call, where he was introduced to investors.
Then, Novo’s parent foundation, the Novo Nordisk Foundation, pulled the rug out from under the company’s board. Board chair Helge Lund—who months prior had announced Doustdar’s hiring—was removed from his position, as were six other members of the board. Incoming board chair and former CEO Lars Rebien Sørensen stood tall behind Doustdar and objected when one analyst referred to the decision as a coup. Names aside, it certainly seemed to signal deeper trouble at Novo.
Then came the next twist: an $8.5 billion counter-offer for Metsera, which seemed to make a normally restrained team at Pfizer livid.
“Pfizer is aware of the reckless and unprecedented proposal by Novo Nordisk to acquire Metsera,” Pfizer said in a statement on Thursday. “It is an attempt by a company with a dominant market position to suppress competition in violation of law by taking over an emerging American challenger.”
Every good story needs a villain. Doustdar seems hell-bent on setting the standards for a new era of leadership at Novo—no matter who he has to step over.
But Doustdar also seems to recognize what he has in Novo Nordisk, the 100-year-old pharma that brought insulin to the masses, straight from the Toronto lab where Frederick Banting, Charles Best and John Macleod co-discovered the life-saving diabetes treatment.
In a Friday LinkedIn post, Doustdar acknowledged the pain that the layoffs have caused to impacted employees. He vouched for them and urged anyone with a role to fill to seek them out.
“For anybody who sees a former colleague with the ‘Open to Work’ badge or who receives a CV on their desk from someone who spent time with us: they are good people, who have a lot to offer,” he wrote. “Try to take the time to have that coffee or take that interview. You won’t regret it.” Many employees commented on the post thanking Doustdar for his empathy.
His tactics seem a bit scorched Earth but with an awareness of the blast zone. Maybe, just maybe, the radical transformation investors wanted for Novo is possible.
Will Metsera—the clear winner no matter what in this crazy scenario—be a part of Novo’s future? The next four business days will be critical. Pfizer seems fired up and ready to fight for that obesity pipeline it couldn’t pull off alone, while Doustdar seems just as willing to fight tooth and nail for Novo’s future.
