Novo Nordisk Foundation forces major shake up

Novo Nordisk A/S announced today that it will hold an extraordinary general meeting on 14 November to elect new members to its board of directors, following discussions with its majority shareholder, the Novo Nordisk Foundation.

Five current board members will not seek re-election. The Foundation has proposed five new candidates for the board.

In a conference call, Lars Rebien Sørensen, Chair of the Novo Nordisk Foundation and proposed new Chair of Novo Nordisk A/S, said there had been no major disagreements but that “fresh eyes” were needed. He said the board had been slow to recognize shifts in the US market, adding that the differences with the existing board primarily concerned “urgency and scope.”

The Novo Nordisk Foundation, which owns more than 25% of shares and controls over 70% of voting rights, effectively holds decisive control of the company. Asked whether other shareholders should have been consulted, Sørensen said that, “given the sensitivity of the topic,” extensive discussions had not been possible, but added that normal shareholder dialogue on company strategy would resume in the future.

Current Board Chair Helge Lund, who will not seek re-election, said the decision reflected a lack of alignment on the company’s ambitions and direction.

“The Board proposed a renewal focused on adding select new competencies while maintaining continuity, whereas the Foundation’s Board wanted a more extensive reconfiguration,” Lund said.

The shake-up follows a turbulent year for Novo Nordisk. The company announced that CEO Lars Fruergaard Jørgensen was stepping down in May and that a global restructuring, involving 9,000 job cuts, would occur in September.

Sørensen is expected to serve as Chair for a limited term of two to three years, supporting the newly appointed CEO Mike Doustdar and helping identify a long-term successor. Sørensen previously served as CEO from 2000 to 2016.

“The Foundation fully supports the Novo Nordisk Board’s appointment of CEO Mike Doustdar and the transformation plans announced on 10 September,” he said.

Meanwhile, political and pricing pressures continue to mount in the United States. Last week, President Donald Trump claimed in the Oval Office that Novo Nordisk would offer its blockbuster diabetes drug Ozempic at a much lower price for Americans. However, Dr Mehmet Oz, responsible for Medicare and Medicaid, clarified that new prices had not yet been agreed and that negotiations were ongoing.

Novo Nordisk has already cut US prices by nearly half earlier this year, but further reductions may be in the pipeline. Operational experience in the US consumer market has been identified as a key factor for the company’s future success.