On Friday the Danish pharmaceutical company Novo Nordisk announced the upcoming departure of its CEO Lars Fruergaard Jørgensen, as the company loses ground in the highly competitive market for obesity treatments. Jørgensen, who has been in office since 2017, will step down once a successor has been appointed.

This decision comes amid intense competitive pressure, particularly from US company Eli Lilly, whose Zepbound injection has outsold Novo's flagship treatment Wegovy in the US market since mid-March. Another warning sign is that Novo Nordisk's share price has fallen 59% since its all-time peak in June 2024.

In a statement, the group explained that the change in leadership was motivated by "recent market challenges and the significant decline in share price since mid-2024."

Under Jørgensen's leadership, Novo Nordisk established itself as the global leader in weight loss treatments thanks to the phenomenal commercial success of Wegovy and Ozempic. This momentum propelled the company to the top of the European stockmarket rankings. However, the arrival of aggressive competitors, innovation deemed to be losing momentum, and an unconvincing pipeline of new drugs have all recently weighed heavily on the group's stockmarket appeal.

The CEO succession is also driven by the powerful Novo Nordisk Foundation, the company's controlling shareholder through its investment arm, which holds 77% of the voting rights. Lars Rebien Sørensen, former CEO of the group for 16 years and current chairman of the foundation, will join the board of directors as an observer with immediate effect. He is expected to formally join the board at the next general meeting.

"Given the current market challenges, the decline in the share price and the wishes expressed by the Novo Nordisk Foundation, the board of directors and Lars Fruergaard Jørgensen have jointly concluded that it is in the best interests of the company and its shareholders to initiate a transition in senior management," Novo Nordisk said.

On the Copenhagen Stock Exchange, the group's share price fell 3% after the announcement, wiping out a 4% gain at the start of trading. It is now down almost a third: -32% since the beginning of the year.