Over Lars Fruergaard Jørgensen’s eight years as CEO, Novo’s sales, profits and share price have almost tripled, the company said. However, the shares have taken a turn since mid-2024, falling by half in one year.
Editor’s Note: This story was updated at 9:30 a.m. ET to provide detail from Novo Nordisk’s conference call and an analyst comment.
Novo Nordisk CEO Lars Fruergaard Jørgensen, who has overseen the Danish pharma’s rise to global prominence thanks to the blockbuster semaglutide franchise, will leave the company earlier than planned.
Jørgensen and the company came to a “mutual agreement” for him to leave “in light of the recent market challenges Novo Nordisk has been facing,” according to the Friday announcement. Jørgensen will continue on in his role in the short term “to support a smooth transition to new leadership.” A search is underway for his replacement.
During a conference call held Friday morning, Novo Nordisk Board Chair Helge Lund repeated over and over that the pharma’s overall strategy has not changed.
“An announcement like the one we have made today will, of course, raise questions about whether they imply changes to the company’s current plans and strategies and how the company will manage in the period until the new CEO is in place,” Lund said. “Let me say this: Novo Nordisk’s strategy remains unchanged as to the plans and initiatives we presented last week in connection with our first quarter financial announcement and the plans have the board’s full support, and we are confident in the company’s ability to execute on those plans, also in the period until the new CEO is in place.”
Jørgensen was not made available to analysts on that call to discuss his departure.
Over his eight years as CEO, Novo’s sales, profits and share price have almost tripled, the company said. However, the shares have taken a turn since mid-2024, falling by half in one year.
With the shares in free fall, the board was approached by the board of its parent company, the Novo Nordisk Foundation, to discuss accelerating Jørgensen’s departure.
“Considering the recent market challenges, the share price decline, and the wish from the Novo Nordisk Foundation, the Novo Nordisk Board and Lars Fruergaard Jørgensen have jointly concluded that initiating a CEO succession is in the best interest of the company and its shareholders,” the company said in the press release.
The foundation also asked for more representation on the Novo Nordisk board. Therefore, Novo Nordisk Foundation Board Chair Lars Rebien Sørensen will “participate as an observer” on the pharma’s meetings effective immediately. He will seek an official nomination in 2026.
“Novo Nordisk’s strategy remains unchanged, and the board is confident in the company’s current business plans and its ability to execute on the plans,” Lund said in the announcement. He went on to thank Jørgensen for his service and his contributions to Novo’s overall success.
But Lund faced a barrage of questions from skeptical analysts who wondered about the timing of the announcement, the reactivity of the board and more. Novo had just announced its first quarter earnings last week, providing no inclination that a CEO transition was expected. Lund said the decision was made Friday during a board meeting and given the accelerated timeline, they chose to announce immediately.
An analyst pointed out that Novo has had five CEOs over its 100-year history, so Jørgensen’s eight-year tenure is relatively short. “It just feels like there’s something pretty wrong here,” the analyst said.
But Lund stuck to his message. “We have a clear strategy, and that remains unchanged,” he repeated. He insisted that the market pressures and the board’s desire to accelerate the CEO departure were the reasons for the change.
Another analyst wondered if the incoming CEO should be worried that the board would step in if the share price continues to fall. “It just seems a little bit confusing and a little bit more reactive to a single shareholder than one might expect of Novo historically,” the analyst said. Lund explained that the board serves all shareholders, not just the Novo Nordisk Foundation.
“The CEO is accountable to the entire board,” Lund said. “Based on the development that we talked about earlier and the wish from the Foundation, the board has had a discussion and concluded that this is in the best interest of the company, and it’s about an accelerated CEO succession process.”
Another analyst on the call noted two other recent departures from Novo—Head of U.S. Doug Langa and Head of Commercial Strategy Camilla Sylvest—and wondered if the board felt that leadership had been lacking. Lund said there was no connection between Jørgensen’s departure and that of the prior two executives.
Lund declined to provide any details on the attributes they would be looking for in Novo’s next CEO. “When it comes to the profile of the new CEO, that is a focus of the succession committee and the board, and we will keep that to ourselves until we are ready to make the announcement,” he said.
Lund did, however, say the company is looking both internally and externally. Several analysts pressed the board chair to speak to whether an external candidate is needed at this time to guide Novo. Lund would not comment.
A whole career
Jørgensen has spent his whole career at Novo, starting out in the company’s corporate finance department in 1991, immediately after finishing university. He climbed through the ranks, taking management and executive positions in finance, IT and corporate development before rising to CEO in January 2017. In that time, the Danish company has become a global powerhouse with its diabetes and then weight loss franchises. Semaglutide, which is marketed for weight loss as Wegovy and diabetes as Ozempic, has become a household name. The drug launched a frenzy for other companies to follow suit as sales climbed.
But rival Eli Lilly has been gaining ground with tirzepatide, marketed as Zepbound for weight loss and Mounjaro for diabetes. The gap in sales for the weight loss versions of the drugs has narrowed, with Wegovy bringing in $2.64 billion for Novo and Zepbound taking home $2.31 billion for the first quarter of the year.
Lilly has also overtaken Novo in building out a pipeline of next-gen drugs for the weight loss space.
In a note Friday morning, BMO Capital Markets suggested that pressure from competitors and misses in the clinic with CagriSema drove the decision.
“While Novo took a commanding early lead in the obesity duopoly, they have ceded ground at a critical moment when more competitors are quickly approaching,” BMO’s Evan Seigerman wrote. “While market pressure likely played a factor, we can’t help but feel that recent competitive positioning and misses on trials like CagriSema could have contributed as well.”
Seigerman said the CEO transition with no change in strategy does not fundamentally alter Novo’s course.
“Although it might satisfy some for investors to drive a CEO transition, without meaningful change in near-term strategy, we continue to see a more difficult path forward for the name,” Seigerman wrote. “We appreciate the company has a longer-term vision that they are looking to move forward with, but the inherent decision to rapidly accelerate the transition of their CEO seems to draw attention to pivots in this strategy that may be necessary.”
