Novo Nordisk will replace its chief executive, Lars Fruergaard Jorgensen, the company announced Friday, citing a sharp decline in its stock price that stemmed from increased competition for its popular weight-loss drug.
The Danish drugmaker said it was searching for a new chief executive to soon replace Mr. Jorgensen, who has led Novo Nordisk for eight years.
The move reflects a remarkable fall in fortune for the maker of one of the most well-known drugs in the world, which is sold as Ozempic for diabetes and Wegovy for obesity. The company’s stock has fallen by 50 percent in the past year.
Sales of the weight-loss drug created boom times for Novo Nordisk. In 2023, the company’s extraordinary success prompted the Danish central bank to keep interest rates lower than it otherwise would. For more than a year, Novo Nordisk’s market value surpassed Denmark’s entire gross domestic product.
But investors have soured on the company as it has faced increasingly fierce competition. Lower-cost copycat versions made through a process known as compounding have cut into Novo Nordisk’s sales. Even more damaging has been competition from Eli Lilly, the maker of the drug sold as Mounjaro and Zepbound.
Novo Nordisk had a head start, winning approval to market its drug for obesity more than two years before Eli Lilly. But Novo Nordisk has been rapidly losing market share to its competitor: American patients have filled more prescriptions this year for Zepbound than for Wegovy, and the gap has been widening, according to the industry data provider IQVIA.
The weight-loss medicines, a class of drugs known as GLP-1s, have become wildly popular because they help patients lose much more weight than previous treatments. But employers that offer health insurance have been overwhelmed by the cost of obesity drugs for their workers, and some have refused to cover them.
In most cases, Medicare will not pay for the drugs to treat obesity. The Trump administration recently rejected a Biden plan that would have greatly expanded access. In most cases patients who pay out of pocket for the drugs, without using insurance, can get them for $500 a month.
The market for weight-loss drugs will change in the coming years.
Eli Lilly is developing new weight-loss drugs, including a daily pill, that are expected to set up years of blockbuster sales for the company.
Novo Nordisk has a hazier path forward. In some countries, but not in the United States, generic versions of Ozempic and Wegovy could become available as soon as next year.
The company has applied for regulatory approval to market a daily pill version of the drug to treat obesity, but that product alone is not expected to turn the company’s fortunes around. Novo Nordisk is also developing a new drug, CagriSema, designed to be injected less frequently, but its clinical trial results have disappointed investors because participants did not lose as much weight as hoped.
