Novo Nordisk Faces Job Cuts and Leadership Change as Profits Plunge and Competition Mounts

Novo Nordisk, the Danish pharmaceutical titan known for its diabetes and weight loss treatments Ozempic and Wegovy, now faces a period of significant turbulence. The company has issued a stark profit warning and alerted staff that job cuts are likely, signalling a shift in strategy as it looks to restrain costs following a dramatic fall in its market value.

Over the past year, Novo Nordisk has endured a share price drop of over two thirds, erasing billions from its market capitalisation. Chief Executive Lars Fruergaard Jorgensen is stepping down amid this upheaval, with Mike Doustdar, previously head of international operations, set to take the reins. The leadership transition comes as Novo Nordisk attempts to stabilise against faltering growth and rising industry pressures.

Recent financial results paint a mixed picture. Although second quarter sales climbed 18 per cent year on year to 11.9 billion dollars, they fell short of analyst expectations. Wegovy sales surged 67 per cent to approach 3 billion dollars, yet slower growth expectations in the US and select international markets have clouded the company’s outlook. Annual sales growth is now forecast at 8 to 14 per cent, markedly down from prior guidance. Operating profit guidance has similarly been revised downwards.

Intensifying competition is squeezing margins and market share. Eli Lilly, the world’s largest drug company, competes fiercely in the diabetes and weight management space, as does AstraZeneca. Novo Nordisk has also been forced to defend itself in US courts against unauthorised versions of semaglutide, Ozempic’s active ingredient. Fresh restrictions on compounded versions of Wegovy from the US Food and Drug Administration have raised hopes but enforcement doubts persist.

The company remains the leader in the American diabetes market with Ozempic holding just over 50 per cent market share. Nonetheless, sales growth in its GLP 1 diabetes category, including Ozempic, slowed to 8 per cent in the first half of the year, reaching 12.1 billion dollars. The wider obesity drug market presents vast potential yet also fierce obstacles and shifting regulatory sands, particularly in the United States.

Amid these challenges, Donald Trump’s threats of a 250 per cent tariff on imported pharmaceuticals has added further complexity and risk to Novo Nordisk’s American operations, which account for a significant proportion of revenue.

Jorgensen has voiced confidence in the new leadership. With more than one billion people globally suffering from obesity and only a small fraction accessing breakthrough therapies, much hangs on execution. The months ahead will be decisive as Doustdar pursues renewed efficiency and positions Novo Nordisk to secure its place at the forefront of this rapidly evolving sector.