The sudden departure of Novo Nordisk chief executive Lars Fruergaard Jørgensen comes not amid scandal or strategic calamity, but a less fashionable misstep: disappointing the stock market.
Once Europe’s most valuable firm, Novo’s shares have halved since last summer.
Investor expectations, it seems, are harder to manage than blood sugar.
Jørgensen was the architect of Novo’s transformation from a diabetes stalwart into a world leader in obesity drugs.
Sales of Wegovy, its blockbuster weight-loss injection, soared. So did the company’s valuation: by June 2024, Novo was worth over $600 billion and traded on 56 times earnings.
Such altitude brings thinner air. Any stumble, and gravity does the rest. And stumble it did.
Competition from Eli Lilly intensified. Cheaper, compounded versions of GLP-1 drugs proliferated in the United States. Clinical trials for Novo’s next generation of treatments disappointed heady expectations.
None of these are fatal, but they are enough to turn a growth fairytale into a more familiar pharmaceutical plotline: one of pricing pressures, pipeline uncertainty, and restive shareholders.
Jørgensen was surprised by his ousting, as were analysts and investors. There was no hint of change during Novo’s earnings call just a week earlier.
Whatever his mistakes, it is hard to pin Novo’s malaise solely on his leadership. When euphoria untethers a stock, a bloodletting often follows.
That Jørgensen became the fall guy may say more about investor nerves than executive negligence.
