Buyers wiped $70 billion off Novo Nordisk’s market worth on Tuesday after the maker of weight-loss drug Wegovy issued a revenue warning and named a brand new CEO, because it battles rising competitors within the weight problems drug market.
Novo named Maziar Mike Doustdar as its new chief government, turning to a veteran insider to revive gross sales and reassure buyers rattled by fears the Danish drugmaker is dropping floor within the weight problems drug race it began.
Doustdar’s appointment did not stem a inventory market rout sparked by Novo slashing its outlook for 2025 gross sales progress to between 8% and 14%, from between 13% and 21% beforehand. Its shares plunged practically 30% earlier than paring some losses to commerce down over 20% by mid-afternoon. The shares at the moment are down 44% this 12 months.
“The magnitude of the steerage lower is a shocker,” Markus Manns, a portfolio supervisor at mutual fund agency Union Funding, a Novo shareholder, instructed Reuters, including that Novo’s points went deeper than “compounded” copycats to Wegovy.
Compounded medicine are custom-made medicines which are based mostly on the identical components as branded medicine.
Novo has been hit by copycats of its GLP-1 medicine Wegovy for weight-loss and Ozempic for diabetes. US regulation bars pharmacies from replicating accepted medicine, however has allowed ‘compounding’ for sufferers needing {custom} doses or formulations.
The corporate mentioned in an announcement that it lower its 2025 gross sales outlook resulting from decrease progress expectations within the second half within the US, each for Wegovy and Ozempic within the GLP-1 diabetes market.
The drugmaker, which grew to become Europe’s Most worthy listed firm following the launch of Wegovy in 2021, is now going through a reckoning because it appears to show issues round after the abrupt elimination in Might of CEO Lars Fruergaard Jorgensen.
At its peak in June 2024, Novo was price as a lot as $615 billion, however its shares have plunged on investor considerations in regards to the firm’s experimental drug pipeline and its capability to navigate challenges within the US market.
“The inventory has gone from being a market darling to one in all its largest letdowns,” mentioned Angelo Meda, portfolio supervisor and head of equities at Banor SIM in Milan, which has a small Novo stake. “The largest concern is the unlawful channel siphoning away market share – one thing that’s arduous to quantify. Rebuilding belief will take time.”
New CEO an insider
Doustdar, an Iranian-born, Austrian nationwide, who grew up in the US, joined Novo in 1992 and can tackle the brand new function on August 7.
He at the moment serves as vp for worldwide operations, a task he took after main the corporate’s companies first within the Center East after which in Southeast Asia, Novo mentioned.
“We have to improve the sense of urgency and execute in another way,” Doustdar instructed buyers and analysts on a name. “The truth that my announcement comes proper after the steerage replace, simply makes the mandate forward much more clear.”
Some analysts and buyers had argued that Novo ought to choose an American, or an individual with intensive expertise working in the US as its subsequent CEO. Novo has misplaced its first-mover benefit in the US this 12 months to rival Eli Lilly.
The brand new chief government’s most pressing problem, in response to buyers and analysts, is to revive Novo’s efficiency in the US, the most important market by far for weight-loss medicine and the place they’re most worthwhile.
Novo launched its weight-loss drug Wegovy practically two and a half years earlier than Eli Lilly’s Zepbound. However Zepbound prescriptions surpassed these of Wegovy this 12 months by greater than 100,000 per week.
In Might, Novo mentioned it anticipated most of the roughly a million US sufferers utilizing compounded GLP-1 medicine to modify to branded therapies after a Meals and Drug Administration ban on compounded copies of Wegovy took impact on Might 22.
“Sadly, our newest market analysis signifies that has not occurred,” Chief Monetary Officer Karsten Munk Knudsen mentioned on a name with analysts on Tuesday. A million or extra US sufferers are nonetheless utilizing compounded GLP-1s, he mentioned.
Novo has stepped up its dialog with the US FDA to restrict illegal compounding of its medicine, the top of US operations David Moore added on the decision. “Compounding continues to be a problem that we have now to handle,” Moore mentioned.
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