Today's Edition
COPENHAGEN (REUTERS)
Investors knocked $70 billion off Novo Nordisk's market value on Tuesday after the maker of weight-loss drugs Ozempic and Wegovy issued a profit warning and named a new CEO, as it battles rising competition in the obesity drug market.
Novo named Maziar Mike Doustdar as its new chief executive, turning to an experienced insider to revive sales and a share price hit by worries the company is falling behind in the weight-loss drug race it started.
News of a change at the top deepened a stock market rout, triggered after Novo slashed its outlook for 2025 sales growth to between 8% and 14%, from between 13% and 21% previously. Its shares plunged nearly 30% before paring some losses to trade down about 20% by mid-afternoon.
Novo has been hit by copycat versions of its weight-loss drugs - mixed or compounded by pharmacies. A crackdown on legal compounded versions of Wegovy in May could improve the situation, although Novo said illegal compounding continued.
The Danish company said in a statement that the cut to its 2025 sales outlook was due to lower growth expectations in the second half in the United States, both for Wegovy and Ozempic in the GLP-1 diabetes market.
The drugmaker, which became Europe's most valuable listed company following the launch of Wegovy in 2021, is now facing a reckoning as it looks to turn things around after the abrupt removal in May of CEO Lars Fruergaard Jorgensen.
At its peak in June 2024, Novo was worth as much as $615 billion, but its shares have plunged on investor concerns about the company's experimental drug pipeline and its ability to navigate challenges in the US market.
Doustdar, an Iranian-born, Austrian national, who grew up in the US, joined Novo in 1992 and will take on the new role on August 7.
Doustdar currently serves as vice president for international operations, a role he took after leading the company's businesses first in the Middle East and then in Southeast Asia, Novo said.
Novo has lost its first-mover advantage in the United States this year to US rival Eli Lilly . The new chief executive's most urgent challenge, according to investors and analysts, is to revive Novo's performance in the US, the largest market by far for weight-loss drugs and where they are most profitable.
Novo launched its weight-loss drug Wegovy nearly two and a half years before US rival Eli Lilly's Zepbound. But Zepbound prescriptions surpassed those of Wegovy this year by more than 100,000 a week.
