Ozempic maker Novo Nordisk suffers ‘meltdown’ as board directors quit

The nonprofit Novo Nordisk Foundation, which owns 77% of voting rights at the drugs company, says it appoints independent directors to “ensure an arm’s length relationship”.

Lund will be replaced by Lars Rebien Sørensen, the chair of the foundation. Sørensen was CEO for 16 years and led the ousting of his successor, Lars Fruergaard Jørgensen, in spring.

“What has happened in the last six months has shown us who the power holders are,” says Martin Jes Iversen from Copenhagen Business School. “It’s the foundation, and to a larger degree than expected.”

At the heart of the dispute is the pace of change at Novo, which has lost roughly 45% of its market value so far this year.

Lund said the foundation wanted “a more extensive reconfiguration” of the board than he had proposed, on top of the 9,000 job cuts that Novo said it would make in September.

But Markus Manns, portfolio manager at Union Investment, which is a Novo shareholder, said the board also oversaw a series of management missteps including launching Wegovy without enough manufacturing capacity and losing their first-mover advantage to rivals such as Eli Lilly.

Another was the study design for CagriSema, its new weight-loss injection, which made the results difficult to compare with Wegovy or Zepbound. Its biggest failure was to underestimate and neglect the booming US consumer market and self-pay.

In an interview with Danish newspaper Berlingske, Sørensen said the company needed “to have a board that is available for sparring with Novo Nordisk’s management 24/7. That has probably been our main complaint – that we have felt a need for renewal on the board with new faces and a faster approach.”

Barclays research said it was surprised by the scale of the clearout, and one Swedish analyst described it as a “complete meltdown”.

Boardroom drama is rare in Denmark, where several major businesses, including Lego, Carlsberg, and Maersk, are controlled by foundations viewed as low-risk, long-term shareholder stewards. Novo Nordisk – and Sørensen – are breaking the mould.

“The foundation is more concerned about market cap development than I had expected,” said Iversen, who has been studying foundation-controlled companies for 25 years.

He also questioned corporate governance issues raised by Sørensen’s occupation of both chair roles at the company and the foundation.

Before this year, Novo Nordisk was a hallmark of stability. It has had just five CEOs since it was founded in 1923 and has been laser-focused on treating diabetes.

It’s been a particularly tough year for Lund, who also stepped down as the chair of UK energy company BP in April, after a pivot into green energy that he oversaw was abandoned following pressure from activists. The Norwegian former Mckinsey consultant became a lightning rod for shareholder dissatisfaction and faced a major challenge of turning around two tankers at once.

The foundation’s proposed appointees are telling of the direction in which Sørensen is aiming. They include Mikael Dolsten, chief scientific officer at US pharmaceuticals maker Pfizer, and Stephan Engels, former financial heavyweight at Danske and Commerzbank.

Novo Nordisk did not respond to requests for comment.

Photograph by Stine Hellmann