Novo Nordisk has announced a sudden leadership change, replacing CEO Lars Fruergaard Jørgensen as it faces mounting pressure in the weight loss drug market. This move comes as the company’s flagship obesity treatment, Wegovy, loses ground to Eli Lilly’s Zepbound, which has rapidly gained traction despite entering the market later. Analysts project the obesity drug market could exceed $150 billion by the early 2030s, intensifying competition and scrutiny of Novo Nordisk’s growth strategy.
While Novo Nordisk initially dominated the space with Wegovy and Ozempic, Eli Lilly has overtaken it in market share. As of mid-2024, Zepbound and diabetes drug Mounjaro accounted for over half of GLP-1 prescriptions in the U.S., outpacing the combined share of Wegovy and Ozempic. By early March 2024, new prescriptions of Zepbound surpassed those of Wegovy, and by August, analysts estimated Zepbound had captured 40% of the U.S. weight loss drug market. Clinical data and real-world use suggest Zepbound leads to greater weight loss, shifting both physician and patient preferences.
Novo Nordisk’s stock has fallen more than 50% in the past year, erasing over $300 billion in market value, despite still being up over 250% since Jørgensen took over in 2017. In contrast, Eli Lilly’s shares have surged nearly 800% since the same time. Investor sentiment soured further after disappointing trial results for CagriSema, a next-generation weight loss drug, which failed to meet weight loss expectations in late 2024.
The company has filed for approval of an oral version of semaglutide, the active ingredient in Wegovy, aiming to capture a share of the growing demand for weight loss pills. However, analysts have criticized the lack of a clear strategy for Novo’s oral obesity portfolio, especially against Eli Lilly’s promising small-molecule pill that offers absorption and dietary advantages. Novo’s experimental pill amycretin may be competitive long-term but is still years away from launch.
The leadership shift followed calls from the powerful Novo Nordisk Foundation for a faster CEO transition and stronger governance amid falling share prices. While the board insists its strategic direction remains unchanged, analysts believe the CEO change underscores the need for a strategic reset as the company navigates pricing pressures, patent cliffs, and evolving regulatory challenges in the U.S. market.
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