Novo Nordisk's New CEO Considers Layoffs to Reduce Costs: Danish TV2 Report

Novo Nordisk's new CEO, Doustdar, is considering layoffs to cut costs, according to a report by Danish TV2. The company's shares declined 2.1% on the news. The decision comes amid a challenging market and increased competition in the diabetes care market.

Novo Nordisk's new CEO, Maziar Mike Doustdar, is reportedly considering layoffs to cut costs, according to a report by Danish TV2. The company's shares declined by 2.1% on the news. The decision comes amid a challenging market and increased competition in the diabetes care market.

The Danish drugmaker has been facing significant pressure from copycat drugs and pricing issues in the U.S. market. The outgoing CEO, Lars Fruergaard Jorgensen, warned that layoffs may be unavoidable. He stated that the company's US market share is being eroded by compounded GLP-1 drugs, which are sold at a much lower price point than Novo's branded products [1].

Novo Nordisk's full-year forecast was revised last week, leading to a 30% drop in share price. The company's operating profit for the second quarter was 33.4bn Danish kroner, missing analyst expectations [2]. Despite this, Wegovy sales rose by 67% year-over-year, reaching US$3.03bn, while sales of injectable diabetes drugs like Ozempic grew by 8% in the first half of the year [1].

The company is pursuing multiple strategies to combat the challenges, including lawsuits against compounding pharmacies and expanding its direct-to-consumer cash-pay platform, NovoCare. However, the market for compounded versions of GLP-1 drugs is of equal size to Novo's business, and more than one million Americans continue to use these drugs despite a US ban [1].

Novo Nordisk's US market share has been volatile, and the company expects continued competition from copycat versions of Wegovy. The company's full-year sales and profit forecasts have been cut, and analysts have lowered their price targets and recommendations [2]. The company remains in negotiations on future legislation and may expand direct-to-patient sales to markets beyond the US.

The company's shares have plunged by 30% in the past week, their worst weekly performance in over two decades. Despite the challenges, Novo Nordisk's global sales continue to grow, with second-quarter sales outside the US more than quadrupling compared to the same period last year [1].

References:
[1] https://www.benefitsandpensionsmonitor.com/news/industry-news/novo-nordisk-signals-layoffs-as-copycats-and-pricing-hit-wegovys-us-momentum/392331
[2] https://economictimes.indiatimes.com/news/international/business/novo-nordisk-ceo-warns-of-layoffs-as-wegovy-challenge-heats-up/articleshow/123149916.cms