Novo chairman steps down amid disagreement in the board over the pace of change

The move is part of a wider shake-up at the maker of Wegovy and Ozempic drugs, with more than half of the board members set to leave. This comes shortly after Novo replaced its CEO after its shares declined, as the company lagged behind its American competitor. Eli Lilly & What.

The overhaul followed a disagreement between the board and Novo Nordisk Foundation, Novo Nordisk’s largest shareholder, over the extent and speed of the planned change, according to Lund.

“It was not possible to reach a common understanding,” Lund said in a statement.

The organization prevailed over Lund and other departing directors in seeking immediate and sweeping board changes to support new CEO Maziar Mike Doostdar’s strategy. The new president is trying to instill a “performance culture” to regain lost ground in the key US market.

“The board may have been too slow to recognize the importance of market changes in the US, thus also prompting management to take necessary actions to adjust the company’s base towards the future business environment,” Sorensen said on a call with analysts. “It was basically the issue of speed and scope that we disagreed on.”

Once a leader in the new category of weight-loss drugs, Novo has fallen behind Lilly in the booming market. The company faced manufacturing issues in the United States and increased sales of counterfeit drugs when demand for Wegovy exceeded supply. Doostdar, who took office in August, plans to cut Novo’s workforce by 11%.

Weight loss boom

The latest moves will widen the turmoil at Novo, which was known for its stable corporate culture until a weight-loss boom sent its shares soaring, briefly making the company the most valuable company in Europe. A decline followed when competitors led by Lilly entered the market.

Novo has also come under pressure from US President Donald Trump’s efforts to lower drug prices. Trump recently announced plans to cut the cost of Ozempic, a successful diabetes treatment, to just $150 a month. However, the scope of the board’s sweeping overhaul has rattled investors.

The board was too slow to recognize and adapt to changes in the U.S. market, and failed to stop the company’s excessive expansion, even as growth slowed, according to Sorensen.

He said in a media call: “This is a major failure.”

Novo shares traded 2.4% lower on Tuesday in Copenhagen. They are down 56% over the past 12 months.

“Clean sweep”

“What surprises me is that it’s a bit like what you might call a clean wipe — like when you break up with a partner and immediately cut off all communication,” said Lars Heiting, head of trading at ArthaScope, an investor in Novo. “I’ve been in this game for nearly 20 years, and I can’t recall ever seeing such widespread change at one time, especially in a company of Novo Nordisk’s size.”

When former CEO Lars Frørgaard Jørgensen was replaced by Dustdar, Sørensen joined the supervisory board, initially as a controller, with the full director role expected from next year. The foundation then issued a statement saying that Sorensen has valuable experience and insights to share with Novo, indicating that he will play a key role in reforming the company.

In addition to Lund, Vice Chairman Henrik Poulsen and five independent board members will not run for re-election, Novo said. Only five directors will remain, before an extraordinary general meeting is held on November 14. Among them is Kasim Kutay, CEO of Novo Holding A/S, which oversees the foundation’s investments.

Novo also proposed several new members for election to the Board of Directors, including former members Pfizer Inc. Chief Scientific Officer Mikael Dolsten and former CFO of Danske Bank A/S Stefan Engels. Helena Saxon, former Investor It has been proposed that a CFO A/B be added to the Board of Directors next year.

Lund also recently left his other position as chairman of the board, from the energy giant baby Plc – after the widening gap between BP and its peers. The company reset its strategic direction earlier this year to return to an oil and gas focus after the failure of its 2020 pivot into low-carbon projects. Weeks later, after the new strategy received a lukewarm reception from investors, Lund said he would step down.

One of the world’s richest charities, the Novo Foundation controls the drugmaker through a two-tier share structure. Sorensen previously served as CEO of Novo Nordisk from 2000 until 2016.