Novo Nordisk has replaced Lars Rebien Sørensen with Maziar Mike Doustdar as chief executive at their headquarters in Denmark. This appointment follows the sudden firing of Lars Fruergaard Jorgensen in May. The company altogether is operating under extreme financial duress. Consequently, it is lowering its operating profit growth projection and long-term forecasts to 2025, leading to this management shakeup. The pharmaceutical behemoth, best known for launching the controversial weight-loss drug Wegovy as well as Ozempic, has come under fire following a sales miss.
The firm has increased its forecast of growth in operating profit. It now projects growth at 10 to 16 percent, a significant decline from its previous conservative projection of 16 to 24 percent. Novo Nordisk raised its outlook for full-year sales and operating profit. It is the second time this year that the company has lowered its expectations. As a result, shares tumbled by as much as 17 percent on news of these events. The decision to lower expectations appears to stem from a combination of factors affecting key products in the company’s portfolio.
Financial Performance Overview
Novo Nordisk is set to report its complete second-quarter earnings on August 6th. Overall, the firm managed a stellar 40 percent jump in operating profit for the April to June quarter. To boot, sales jumped 18 percent from this time last year. Operating profit jumped by 29 percent in the first six months of the year. Despite the difficulties faced in recent weeks, this points to a strong performance.
Novo Nordisk today lowered its expectations for the 2025 – measured in Danish kronor – to growth of 8 to 14 percent. While this is an increase from their original prediction of 13 to 21 percent, this somewhat cautious projection is a good indicator of the company’s wariness about changing market dynamics and how their products are performing.
“The lowered sales outlook for 2025 is driven by lower growth expectations for the second half of 2025,” – Novo Nordisk (Reuters)
Market Dynamics Impacting Sales
The issues being experienced by Novo Nordisk today are inextricably linked to its star players Wegovy and Ozempic. According to reports, Zepbound prescriptions have exceeded Wegovy by more than 100,000 a week this year. This change begs the question of just how competitive Wegovy will be in the highly lucrative pending weight-loss market, especially in the U.S.
As market analysts point out, expectations of growth for Wegovy in the obesity market are waning. They highlight lower peak sales expectations for Ozempic in the diabetes market. Novo Nordisk has admitted that these elements have played a role in their lowered projections.
“This is related to lower growth expectations for Wegovy in the US obesity market, lower growth expectations for Ozempic in the US GLP-1 diabetes market, as well as lower-than-expected penetration for Wegovy in select IO (International Operations) markets.” – Novo Nordisk (Reuters)
Leadership Transition
Maziar Mike Doustdar’s appointment seems fortuitous, considering the precarious position Novo Nordisk finds itself in today. His leadership will be crucial as the company continues to face these financial headwinds and works to regain investor confidence. Novo Nordisk’s controlling shares are held by the Novo Nordisk Foundation. For the foreseeable future, it will remain the most powerful lever to affect strategic decisions.
Doustdar’s leadership comes as Novo Nordisk seeks to double down on its core products. In addition to proactively addressing the cause of its recent sales decline. Her newly appointed successor is no stranger to navigating these turbulent waters. This experience could be a key factor in turning around the company’s lagging performance in the cutthroat world of Big Pharma.
