Having become Europe’s number one pharma success story thanks largely to its blockbuster weight-loss drug, Wegovy, Novo Nordisk has been hit with stiff competition from Lilly and seen a steep decline in market performance. The Danish drugmaker has moved to oust its longstanding CEO and is looking to regain lost ground in the obesity market via in-house innovation and dealmaking, but its future remains uncertain.
Fresh Leadership
In the not very distant past, Novo Nordisk was considered the star of European pharma. The company made major waves with its GLP-1 antagonist approach to diabetes and weight loss and positioned itself as a leader in those areas. At the height of its success, the Copenhagen-based firm’s stock valuation become the highest in Europe.
In recent times, however, Novo has come up against some heavy head winds. Declining market performance brought on a 50+ percent decrease in its stock over the past year with 2025 becoming its worst monthly forecast in two decades. Further confirming the downturn, last week the company took the dismaying step of lowering its 2025 forecast while its CEO Lars Fruergaard Jørgensen stepped down.
Jørgensen, who was in the role for eight years, joined the company back in 1991. Responsible for steering Novo through much of its latter success, he was designated as the FT’s person of the year in 2023. But in light of the firm’s current struggles, a shift in leadership was looming and the Novo Nordisk Foundation, the nonprofit that holds voting control over the firm, pushed to initiate “an accelerated CEO succession” process.
As a result, Novo reached a joint decision with Jørgensen. “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 company said.
What Went Wrong?
Novo Nordisk, a long-term leader in insulin for diabetes, became the dominating force in GLP-1 drugs when its Ozempic for Type 2 diabetes was introduced in 2017. Yet another win for the company came with the 2021 arrival of its Wegovy med for weight loss. Sales boomed and at its peak Novo Nordisk was worth some USD 615 billion.
Yet the firm soon suffered from its success and the rollout of Wegovy was hampered by significant supply shortages as the company struggled to meet the exploding demand. Since then, Novo has ramped up production capacity with moves such as the acquisition of US-based CDMO Catalent last year and the significant expansions of its existing production sites in Denmark, France, Brazil, China and the US.
But the struggle to produce a sufficient supply of its blockbuster drug was only the beginning of Novo’s troubles. The Danish drugmaker has come up against some stiff competition. Namely, from Eli Lilly, whose diabetes therapy Mounjaro was launched in 2022. Lilly went on to further compromise Novo’s position with its obesity fighter, Zepbound, which came online in 2023. More damaging still were the studies showing that Zepbound has greater weight loss potential than Wegovy and its subsequent larger volume in US prescriptions.
Additionally, Novo’s top competitor is making headway with a once-daily pill format, which, if approved, stands to be the first choice for patients over the current injectable format of Wegovy and Zepbound.
Meanwhile, other drugmakers have jumped into the weigh-loss game and are pushing their candidates through the pipeline, including Amgen whose MariTide drug is in late-stage development.
Angling Towards New Potential?
Novo Nordisk has long seen the writing on the wall. To hold onto its status in the lucrative weight-loss market, which is expected to be worth USD 150 billion market by the early 2030s, the firm has been advancing new weight-loss candidates, and more recently looking to dealmaking.
Novo has, nonetheless, come up against R&D hurdles. Its CagriSema obesity shot, initially due be launched in 2026, underwhelmed investors and caused Novo’s shares to fall be 6.3 percent after disappointing trial results in March. Consequently, the company announced a reorg of its R&D structure shortly afterwards.
Earlier this month Novo struck a USD 2.2 billion deal with the US biotech Septerna to develop new oral small molecule pills for obesity, type 2 diabetes, and other cardio-metabolic diseases. This new deal may signal a shift towards oral small molecule options, diversifying Novo’s historically peptide-based focus.
Previously, it had also brought another new kind of weight-loss horsepower onboard with the acquisition of rights to an early experimental drug from China’s United Laboratories International. The drug uses what is known as a three-pronged approach to promoting weight loss and regulating blood sugar as opposed to most available obesity treatments that target only one or two gut hormones.
