Novo Nordisk Shares Plummet Amid Profit Forecast Downgrades and Leadership Changes

Weak financial numbers have triggered a steep decline in the stock price of Danish pharmaceutical giant Novo Nordisk. Following the release of its quarterly figures on Tuesday, shares plunged by approximately 30 percent, ultimately stabilizing with a decline of over 20 percent late in the afternoon trading session. The company, renowned for its weight loss injection Wegovy, has lowered its revenue growth projections for the year to a troubling range of 8 to 14 percent. This predicts disappointment in contrast to earlier market expectations, which estimated growth between 13 and 21 percent. In addition to cutting revenue forecasts, Novo Nordisk has also revised downward its profit expectations. The reductions come as the company faces intensified competition in the lucrative weight loss drug market. In response to these challenges, Novo Nordisk has appointed Maziar Mike Doustdar, a veteran of the firm since 1992, as the new CEO. Doustdar, who previously headed international operations, is expected to refocus efforts in the US market and re-establish the company's competitive stance. The previous CEO, Lars Fruergaard Jorgensen, was dismissed by Novo Nordisk and the company’s major shareholder, the Novo Nordisk Foundation, back in May; however, he remained in his position until a successor was officially named. The company's decreased revenue outlook is primarily attributed to poor growth expectations for the latter half of the year, including diminished sales for Wegovy in the US market and disappointing outcomes for its diabetes medication, Ozempic. Furthermore, Wegovy’s market penetration in several international markets has not met expectations. Compounding these issues is the intense competition from US rival Eli Lilly, whose weight loss drug Zepbound has recently eclipsed Wegovy in weekly prescriptions in the US—widely recognized as the largest and most lucrative market for such drugs. The timing of the new CEO’s appointment is particularly critical as the pharmaceutical industry grapples with uncertain economic factors, including US President Donald Trump’s proposals for import tariffs and calls for manufacturers to lower prices. Under Jorgensen's leadership, Novo Nordisk ascended to become the most valuable publicly traded company in Europe, peaking at a market valuation of $615 billion in June 2024, only to witness its market value plummet by more than half since then. As the company embarks on a new chapter under Doustdar’s direction, stakeholders and analysts will be looking for signs of revitalization amid a challenging business landscape. Related Sources: • Source 1 • Source 2