Novo Nordisk, the maker of weight-loss drug Wegovy, seeks a new CEO who can help the company make up the ground it has lost to Eli Lilly.
It’s a tall order. The company is better known for stability than disruption; it has had just five CEOs since it was founded in 1923 and has stayed focused on treating diabetes.
Lars Fruergard Jørgensen led the company through a tumultuous transformation, bringing Wegovy to market in the US in 2021 and fuelling a dramatic rally in its stock price.
Shares have tumbled around 50% in the past year, and Jørgensen was fired last month. There is no obvious successor within Novo. “They don’t have a crown prince,” said Niels Westergård-Nielsen, a professor at Copenhagen Business School.
When Jørgensen got the job; there were two internal rivals, both of whom left for other CEO roles.
But an outsider may find its tight-knit culture a challenge. Professor Westergård-Nielsen said: “Everyone in Novo Nordisk identifies themselves with the company, which is an enormous strength – there’s a strong company spirit.
“But on the other hand, they may want to see something new, in a world where Danish cosiness doesn’t work anymore.”
In the meantime, Novo has boomerang leadership; its former chief executive, Lars Sørensen, has returned, not as CEO but to join the board of directors and oversee the succession.
There is a lot of catching up to do. Novo was first to market with its drug, but Lilly’s Zepbound has proved more effective, with a 20% weight loss, compared with 13.7% for Wegovy (according to a Lilly study).
The Danish company recently announced partnerships with Hims & Hers Health and other US telehealth providers, which will extend its reach with patients – especially ones paying cash for the drug. But the bigger challenge is next-generation treatment, including an oral version of the drug – so far only available as a self-administered injection.
Lilly said that in clinical trials patients on the highest dose of their weight-loss pill, Orforglipron, lost an average 7kg, nearly 8% of their body weight. Meanwhile, Novo is developing an injectable drug, CagriSema. Novo claimed it would produce a 25% weight loss but when the drug fell short of expectations, helping patients lose only 22.7%, shares dropped.
The potential market remains vast. Just one in five Americans diagnosed as overweight or obese is receiving any treatment, according to the non-profit FAIR Health. And research suggests GLP-1s, the category of drug that includes Wegovy and Zepbound, may be effective in treating a broad range of other conditions, including heart disease.
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