Novo Nordisk Foundation Initiates Major Board Overhaul Amid Market Challenges

In a significant shake-up of pharmaceutical giant Novo Nordisk's leadership, the company's largest shareholder, the Novo Nordisk Foundation, has called for the replacement of more than half of the drugmaker's board. This dramatic move comes as the company grapples with market shifts in the obesity drug sector and recent large-scale layoffs.

Board Restructuring and Shareholder Meeting

The Novo Nordisk Foundation, which controls 25% of shares and 70% of voting rights through its subsidiary Novo Holdings, has called an extraordinary general meeting of shareholders for November 14. At this meeting, a new slate of board candidates handpicked by the foundation will be presented for election.

Key changes include:

• Board Chair Helge Lund, Vice Chair Henrik Poulsen, and five independent members will not stand for re-election.
• Lars Rebien Sørensen, former CEO of Novo Nordisk and current chair of the Novo Nordisk Foundation, is proposed as the new corporate board chair for a term of up to three years.
• Cees de Jong, board chair of Novonesis, is nominated as the new vice chair.
• Britt Meelby Jensen, Mikael Dolsten, and Stephan Engels are proposed as new board members.

The foundation plans to nominate Helena Saxon and one other person as board members at the next regular general meeting in 2026.

Reasons Behind the Board Overhaul

The drastic board restructuring is attributed to several factors:

1. Slow market recognition: Lars Rebien Sørensen stated that the current board was "too slow in recognizing" changes in the obesity drug market, leading to lagging growth for the weight loss shot Wegovy.

2. Recent layoffs: In September, Novo Nordisk announced large-scale layoffs affecting 9,000 workers, which Sørensen described as a "huge failure" that requires introspection at all levels of the company.

3. Market competition: Novo Nordisk's dominant position in the obesity treatment market has been challenged by competition from Eli Lilly's Zepbound and drug compounders who have capitalized on manufacturing capacity constraints.

Industry Implications and Company Outlook

This board overhaul comes during a turbulent period for Novo Nordisk, marked by underperforming sales and recent leadership changes, including the appointment of Maziar Mike Doustdar as CEO in August. The company faces the challenge of maintaining its market position in the rapidly growing obesity treatment sector while addressing internal restructuring and external competitive pressures.

The extraordinary general meeting on November 14 is expected to formalize these changes, potentially setting a new strategic direction for one of the pharmaceutical industry's key players in the obesity and diabetes treatment markets.