Novo’s Chief to Retire, Veteran Joergensen to Succeed Him
(Bloomberg) -- Novo Nordisk A/S, the world’s biggest maker of insulin, said Chief Executive Officer Lars Rebien Soerensen will retire by the end of 2016, unexpectedly early, after 16 years at the helm.
Lars Fruergaard Joergensen, executive vice president and head of corporate development, will take over as CEO on Jan. 1, 2017, Novo said in a statement. Soerensen had said he would stay on until his contract expired in 2019.
Joergensen takes over at a time when Novo leads the market for diabetes treatments but faces some pressures, especially as new cheaper copycat medicines force it to cut prices or lose ground. The Bagsvaerd, Denmark-based company trimmed its sales and profit forecasts for the year last month amid intensifying pricing pressure from customers in the U.S., its largest market.
“We have unprecedented challenges in front of us in terms of competition and a tougher pricing environment, but we also have the best-ever portfolio in the history of Novo Nordisk to compete,” Joergensen said in a news conference. “You should not expect massive changes when I take over Jan. 1. We have a robust strategy, and the team to execute on that strategy.”
Joergensen joined Novo in 1991 as an economist and has held posts in the Netherlands, the U.S. and Japan over the years. Succeeding Soerensen, chosen last year by Harvard Business Review as the best-performing CEO in the world, will be “a tall order,” Chairman Goeran Ando said in the statement.
Soerensen will be nominated to become a board member of the Novo Nordisk Foundation and the foundation’s holding company, Novo A/S, next March.
Novo shares dropped 0.5 percent to 311.20 kroner at 12:12 p.m. in Copenhagen trading, after rising as much as 1.6 percent earlier. The stock has dropped about 18 percent in the past month.
Novo said on Aug. 5 that growth this year would be weighed down by the loss of a “sizable” contract for its top-selling insulin NovoLog. Lower prices and escalating competition from biosimilars -- or cheaper copies of complex biologic drugs -- within hormone replacement therapy and diabetes have dimmed prospects for the Danish company, which controls almost half the global market for insulins.
Unlike other drugmakers who have diversified, Novo is betting that diabetes treatments, which account for almost 80 percent of its sales, will become an even bigger part of its business as the number of people suffering from the condition surges. The company is counting on the insulin Tresiba and diabetes medicine Victoza to boost sales even as U.S. insurers and payers demand lower prices.
The company also announced a number of other executive changes on Thursday, effective immediately, with Jakob Riis becoming executive vice president for North American operations and Maziar Mike Doustdar, who will oversee an expanded international unit.