With Novo Nordisk's CEO Out, Wall Street Wants an American Leader
Despite a massively successful run as Chief Executive Officer (CEO) of pharma giant Novo Nordisk A/S (NYSE: NVO), Lars Fruergaard Jørgensen is on the outs. On May 16, Novo made the announcement that Jørgensen would step down. He will continue to lead the company until the board chooses a new CEO.
Jørgensen became the CEO of Novo back in January 2017. From the end of January 2017 to May 16, Novo Nordisk achieved a total return of approximately 304%. This significantly outpaced the approximately 199% return of the S&P 500 Index over that period. However, the past 52 weeks or so have been extremely rocky for Novo. As of the close on June 3, 2025, the stock has declined by almost 52% from its peak on June 25, 2024. Ultimately, the company’s recent struggles were too much for Jørgensen to overcome. So, what may have caused Jørgensen’s departure, and what is next for Novo?
Jørgensen’s Journey: What Led Up to the CEO’s Dismissal
To those paying close attention to the weight loss and diabetes drug market, Novo Nordisk’s recent difficulties are no secret. The company has been quickly losing market share to Eli Lilly and Company (NYSE: LLY), the world’s most valuable pharma stock. Studies have shown that Lilly’s tirzepatide achieves around 47% more weight loss than Novo’s semaglutide. Additionally, Lilly has done a much better job of remedying weight loss drug shortages, helping fill the supply gap left by Novo.
In Q1 2024, sales of Novo’s Wegovy and Ozempic totaled around $5.6 billion. This compares to $2.3 billion in sales for Lilly’s Zepbound and Mounjaro. That equated to an approximately 71% market share for Novo at the time. Based on the sales of those four drugs, that share has fallen to around 55% as of Q1 2025. The rapidly growing sales of Zepbound have been a big reason for this.
Recent results from Lilly and Novo’s developmental weight loss drugs may have been the final nail in the coffin for Jørgensen. In December, Novo announced Phase 3 Food and Drug Administration (FDA) trial results for its experimental drug CagriSema. The drug showed an average weight loss of 22.7% after 68 weeks. This was just barely higher than the 22.5% average weight loss that tirzepatide patients achieved after 72 weeks on the highest dose. It also missed expectations for 25% weight loss. Novo shares plummeted nearly 18% after the release of this news.
Novo then released CagriSema results for patients with obesity and type 2 diabetes on March 10 that disappointed investors once more. This led to shares dropping over 9%. Meanwhile, Lilly met expectations on its oral GLP-1, orforglipron, for type 2 diabetes patients. Shares rose by over 14% on April 17 as a result. Since June 25, 2024, Lilly’s shares have retreated much less than Novo’s, down only around 17%.
Novo’s Next CEO: An American Outsider? U.S. Reliance Could Make It a Logical Choice
According to Reuters, the company’s next CEO hire is likely to be someone who is not currently with the company. Reuters interviewed six people, all of whom believe the company will make a significant push for an external hire. Several analysts on Wall Street think the company would be smart to hire an American. This would help the company negotiate with the Trump administration. Lilly’s American CEO, David Ricks, has been adept at this.
Such a move would make sense considering 57% of Novo’s sales last quarter came from the United States. Around 69% of Wegovy and Ozempic sales came from the United States, further highlighting the country's importance to Novo. However, the company has only ever had Danish CEOs. Hiring an American could create internal issues.
Still, whoever the new CEO is will need to reinvigorate Novo’s drug pipeline to compete with Lilly. The company hopes that UBT251, a “triple-agonist” drug it bought the rights to from United Laboratories International (OTCMKTS: ULIHF), can do the trick.
Novo’s Path Forward Remains Murky; August Earnings Could Shed Light
Overall, the change at Novo’s top position makes sense. Missteps have accelerated Lilly’s ability to catch up significantly in the proverbial GLP-1 race between the two. However, Lilly deserves a lot of credit as well for its highly efficacious treatments. At this point, investors are largely waiting in limbo when it comes to Novo stock. The company next reports earnings on Aug. 6, providing an opportunity to get more details on its plans and reevaluate the stock.
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