Danish pharmaceutical company Novo Nordisk A/S, 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. Shares had skyrocketed after the introduction of Wegovy and diabetes medicine Ozempic, which are both based on the same basic ingredient, semaglutide.
At the peak, the company’s market capitalization – or the combined price of all its shares – exceeded Denmark’s annual gross domestic product and made it Europe’s most valuable company, a title it has since lost to software maker SAP.
Novo shares fell about 4% in midday trading Friday. Lilly shares rose 1.4% in premarket trading in New York following the news. Jorgensen will continue as CEO “for a period to support a smooth transition to new leadership,” Novo said, adding that a search for a new leader has already begun.
Novo has had only three CEOs since 1990, and many of its managers — including Jorgensen — have spent their entire careers at the company. Jorgensen’s predecessor, Lars Rebien Sorensen, who’s now joining the board in an observer role, had the top job from 2000 to 2016 while Mads Ovlisen was in charge from 1981 to 2000.
Jorgensen has been with Novo since 1991 and was appointed CEO in January 2017. The company’s market capitalization has more than tripled during his tenure.
The Novo Nordisk Foundation started a dialog with Novo’s board “on the merits of an accelerated CEO succession,” Novo said, adding that the move was a joint decision.
The organization is the wealthiest non-profit foundation in the world, with assets of 1.06 trillion kroner ($159 billion), according to the latest annual report. This is about twice the size of the Gates Foundation.