Novo Nordisk Foundation Overhauls Board Amid Obesity Market Challenges

In a significant shake-up at one of the world's leading pharmaceutical companies, Novo Nordisk's largest investor has called for a dramatic restructuring of the company's board. This move comes as the Danish drugmaker grapples with shifting dynamics in the competitive obesity treatment market and recent large-scale layoffs.

Foundation Pushes for Board Overhaul

The Novo Nordisk Foundation, which controls 25% of shares and 70% of voting rights in Novo Nordisk, announced on Tuesday its intention to replace more than half of the company's board members. Lars Rebien Sørensen, chair of the Novo Nordisk Foundation and former CEO of Novo Nordisk, cited the current board's slow reaction to changes in the obesity drug market as the primary reason for this drastic measure.

An extraordinary general meeting of shareholders has been called for November 14, where the foundation will propose a new slate of board candidates. This includes Sørensen himself as the new corporate board chair, with a term limited to three years.

Leadership Changes and Market Pressures

The board restructuring is the latest in a series of significant changes at Novo Nordisk. The company recently announced the layoff of 9,000 workers and underwent a CEO transition, with Maziar Mike Doustdar taking the helm in August. These moves come as Novo Nordisk faces increased competition in the obesity treatment market, particularly from Eli Lilly's Zepbound and drug compounders producing cheaper alternatives to Novo's popular weight loss shot, Wegovy.

Sørensen did not mince words about the situation, stating at a press conference, "This is a huge failure, and I think many in the company will have to look at themselves, both in the company, in the management and in the board and [ask what] we have done differently to avoid this? Because it is hugely disrupting to have to let go of that many people."

New Board Composition and Future Outlook

The proposed changes will see the departure of current Board Chair Helge Lund, Vice Chair Henrik Poulsen, and five independent members. In their place, the foundation has nominated several new candidates, including Cees de Jong as vice chair, and Britt Meelby Jensen, Mikael Dolsten, and Stephan Engels as members. Four employee-elected board members and Kasim Kutay, CEO of Novo Holdings, will retain their positions.

While the current board had suggested a more gradual renewal process, the foundation opted for a more extensive reconfiguration. This decision underscores the urgency felt by the company's major stakeholder to address the challenges in the rapidly evolving obesity treatment market and to position Novo Nordisk for future growth and competitiveness.