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Novo Nordisk’s strategy tested as investors push back on board revamp
Flags with the logos of Danish drugmaker Novo Nordisk, maker of the blockbuster diabetes and weight-loss treatments Ozempic and Wegovy are pictures while the company presents the annual report at Novo Nordisk in Bagsvaerd, Denmark, on February 5, 2025.
Mads Claus Rasmussen | Afp | Getty Images
A leadership shakeup at what was once Europe’s most valuable company is likely to be cemented Friday as Novo Nordisk’s controlling shareholder tightens it’s grip on the weight-loss drugmaker, even as minority shareholders express discontent.
Novo has found itself in an increasingly chaotic situation as of late, with shares plunging and investor confidence waning, as its role as the leading player in the highly lucrative weight-loss space is being called into question.
The maker of diabetes and weight-loss drugs last month announced an Extraordinary General Meeting for Nov. 14 to replace its independent board members, including Chair Helge Lund, after it became impossible to reach an agreement between the views of the current board and the Novo Nordisk foundation board — the company’s majority shareholder.
Norges Bank Investment Management (NBIM), one of the larger minority shareholders, said earlier this week it would abstain from voting at Friday’s EGM, indicating discontent. Other shareholders, such as California State Teachers’ Retirement System, have also said they’ll vote against the proposal. NBIM and CalSTRS both declined to comment further.
Lund will be replaced by company veteran Lars Rebien Sørensen, already chair of the Foundation board. The 71-year-old also served as Novo Nordisk CEO between 2000 and 2016.
The foundation also proposed Cees de Jong to become vice chair and Mikael Dolsten, Britt Meelby Jensen and Stephan Engels to become members.
Early Friday, Novo said Dolsten, formerly head of R&D at Pfizer, had decided to withdraw his candidacy to the board due to personal circumstances. Novo shares were down 1.8% to $312.90 in morning trading.
“It is rare that a company of that scale to make that degree of change that quickly,” Andrew Pettigrew, Emeritus professor at University of Oxford, and an expert of theories of change, told CNBC.
“It’s usually precipitated by some awful crisis, which is throwing them off a cliff, but probably also a period when they were blind to what was going on underneath them. In other words, they were surprised by a sudden change, and it usually takes that to overthrow an existing power group in a company, especially if they’ve been in power for a long time,” Pettigrew added.
The current board was “too slow in recognizing the significance of the market changes in the United States,” Sørensen told analysts at a call following the announcement, adding that two more members would be announced in due course.
Novo is broadly viewed as having fallen behind U.S. peer Eli Lilly which has rapidly taken market share from Novo, as its rival drugs Mounjaro and Zepbound have shown more pronounced weight loss at the highest dose.
“It’s a matter of urgency and scope,” Sørensen said in October about the proposed changes to the board, however also saying the foundation is “fully aligned” behind Novo’s current strategy under new CEO Mike Doustdar.
A challenging U.S. market
Another rationale for the board cull is that a new configuration would bring in more people with direct experience from a U.S. consumer perspective to help navigate the challenging market. It comes amid increasing competition both from Eli Lilly and so-called compounding pharmacies that make cheaper copycat version of the drugs, and a shift towards direct-to-consumer sales.
Like for many pharmaceutical companies, the U.S. is Novo’s largest market. In the first nine months of 2025, the U.S. market accounted for 56% of total sales, measured in Danish kroner.
Analysts, however, have expressed scepticism that the new board will bring in the intended experience. “On balance, it might seem the new board actually possesses less rather than more commercial, large pharma expertise,” Deutsche Bank analyst Emmanuel Papadakis said.
Novo shares have fallen 12% since the board shakeup was announced and have lost 58% since the start of this year. Last week, the company reported third-quarter results that missed estimates, and lowered the upper range of its full-year guidance citing slower growth expectations for Ozempic and Wegovy.
It’s but one of many dramatic happenings taking place at the Danish pharma giant lately.
“There have been so many moves this year that show Novo as a conflicted company,” noted Morningstar analyst Karen Andersen. “With such a new direct-to-patient market emerging as a critical piece of future obesity drug sales growth, and compounders remaining a real competitor in the market, it’s not hard to imagine that the boards and management might not have the same vision for how Novo should respond,” she added.
Over the weekend, Novo pulled out from a dramatic bidding war against U.S. giant Pfizer over an experimental weight-loss drug by clinical-stage biotech Metsera, stepping away from a deal analysts have described as unusual.
The board changes come just months after Novo appointed Doustdar as chief executive, booting former CEO Lars Fruergaard Jørgensen, in part blaming him for the current trajectory of the company and its shares. Doustdar has since announced a reorganisation, including laying off over 10% of employees globally.
