Novo Nordisk, the maker of blockbuster weight loss drug Wegovy, said Friday its CEO was stepping down by “mutual agreement” with the company’s board of directors, citing “recent market challenges” and a steep decline in the company’s share price.
Lars Fruergaard Jorgensen’s departure comes a week after the company downgraded its sales and profits forecast, and follows a more than 50% decline in the company’s shares since mid-2024.
The company said May 7 that Wegovy sales in the U.S. had been undercut by cheaper replica drugs produced by so-called compounding pharmacies using active ingredients of patented drugs. They are relied on as substitutes when name-brand drugs aren’t available. The Food and Drug Administration, however, has said however that shortages have eased and the replicas will have to cease in the coming months.
On Sunday, a study published in the New England Journal of Medicine showed that people lost more weight using Wegovy competitor Zepbound, made by pharmaceutical company Eli Lilly. Eli Lilly funded the study. Novo Nordisk’s share price is down 54% from its peak in June 2024. Its U.S.-listed shares fell another 3% in premarket trading Friday.
The company, headquartered in Bagsvaerd, Denmark, praised Jorgensen has having led Novo Nordisk through a “significant growth journey and transformation” during his eight-year tenure as CEO.
“The changes are, however, made in light of the recent market challenges Novo Nordisk has been facing, and the development of the company’s share price since mid-2024,” the company said in a statement. The board and Jorgensen “have jointly concluded that initiating a CEO succession is in the best interest of the company and its shareholders.”
Jorgensen will continue as CEO “for a period” to support a smooth transition.
