Novo Nordisk (NVO) CEO Lars Fruergaard Jørgensen is stepping down after eight years in the role, during which he led the company to an all-time high in the markets.
Despite being the first to market in the latest generation of GLP-1 drugs, notably with its well-known diabetes drug Ozempic and weight-loss drug Wegovy, Novo Nordisk has recently faced several headwinds, causing the stock to suffer.
That includes missing sales estimates in first quarter earnings this year.
Those headwinds contributed to the decision on Friday, the company said in a statement.
“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 statement said.
Jørgensen, who has been with the company since 1991, will stay on through the transition as the company searches for a new leader.
The moved surprised Wall Street, but does not seem to be weighing heavily on the stock — down less than 3% in trading Friday. The decision by the board came as a surprise to Jørgensen, too, according to Bloomberg.
Analysts expressed concern and confusion by the sudden move on a call with board chair Helge Lund on Friday.
This seems “a little bit confusing, and a little bit more reactive to a single shareholder than one might expect of the company historically,” one analyst said on the call.
Lund reiterated several times in response to similar statements that the company “has a clear strategy and that remains unchanged.”
But he did concede that until now, the board had been focused on a different succession timeline, which was accelerated at the request of the company’s largest shareholder — parent company Novo Holdings.
In June 2024, the company was trading at a high of more than $140 per share, and the stock is up nearly 107% in the past five years.
Read more about Novo Nordisk’s stock moves and today’s market action.
After years of being known for its insulin and diabetes products, Novo Nordisk produced what some have deemed an accidental blockbuster in the form of Ozempic, a diabetes treatment that showed greater weight loss than any prior treatment. It subsequently released Wegovy to target obesity.
The move has been credited with changing the narrative and stigma around obesity.
But trouble began brewing for the company when the drug’s popularity outstripped its supply and Novo Nordisk began to face stiff competition from Eli Lilly (LLY).
