At its peak in June 2024, Novo was worth as much as $US615 billion, but its shares have plunged on investor concerns about the company’s experimental drug pipeline and its ability to navigate challenges in the US market.
“The stock has gone from being a market darling to one of its biggest letdowns,” said Angelo Meda, portfolio manager and head of equities at Banor SIM in Milan, which has a small Novo stake.
“The biggest concern is the illegal channel siphoning away market share – something that’s hard to quantify. Rebuilding trust will take time.”
New CEO an insider
Doustdar, an Iranian-born, Austrian national, who grew up in the United States, joined Novo in 1992 and will take on the new role on August 7.
He currently serves as vice president for international operations, a role he took after leading the company’s businesses first in the Middle East and then in Southeast Asia, Novo said.
“We need to increase the sense of urgency and execute differently,” Doustdar told investors and analysts on a call.
Novo has been hit by copycats of its GLP-1 drugs Wegovy for weight-loss and Ozempic for diabetes.Credit: Bloomberg
“The fact that my announcement comes right after the guidance update, just makes the mandate ahead even more clear.”
Some analysts and investors had argued that Novo should select an American, or a person with extensive experience working in the United States as its next CEO. Novo has lost its first-mover advantage in the United States this year to US rival Eli Lilly.
The new chief executive’s most urgent challenge, according to investors and analysts, is to revive Novo’s performance in the United States, the largest market by far for weight-loss drugs and where they are most profitable.
Novo launched its weight-loss drug Wegovy nearly two and a half years before Eli Lilly’s Zepbound. But Zepbound prescriptions surpassed those of Wegovy this year by more than 100,000 a week.
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In May, Novo said it expected many of the roughly one million US patients using compounded GLP-1 drugs to switch to branded treatments after a US Food and Drug Administration ban on compounded copies of Wegovy took effect on May 22.
“Unfortunately, our latest market research indicates that has not happened,” chief financial officer Karsten Munk Knudsen said on a call with analysts on Tuesday. One million or more US patients are still using compounded GLP-1s, he said.
Novo has stepped up its dialogue with the US FDA to limit unlawful compounding of its drugs, the head of US operations David Moore added on the call.
“Compounding continues to be an issue that we have to address,” Moore said.
Reuters
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