Ozempic Is a Hit. So Why Is the Drugmaker’s CEO Out?

Summary

Podcast Summary: The Journal – "Ozempic Is a Hit. So Why Is the Drugmaker’s CEO Out?"

Release Date: May 21, 2025

Hosts: Ryan Knutson and Jessica Mendoza
Production: The Wall Street Journal & Gimlet, Co-produced by Spotify

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Introduction to Ozempic and Novo Nordisk

Timestamp: 00:08 – 02:13

Jessica Mendoza opens the episode by highlighting the prominence of Ozempic, a drug containing semaglutide, within the pharmaceutical industry. Filmed on an assembly line in Denmark, semaglutide has become a "bonafide cultural phenomenon."

Jessica Mendoza [00:08]: "In the world of big pharma, this is the sound of liquid gold."

Pete Loftus underscores Ozempic’s success, positioning it among the most successful drugs historically, both financially and culturally.

Pete Loftus [00:31]: "One of the most successful of all time. It's up there from a financial perspective, but also just from a cultural impact perspective."

They introduce Novo Nordisk, the company behind Ozempic, noting its century-long history and recent ascent to being one of Europe's most valuable companies, driven by Ozempic and its sister drug Wegovy.

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Novo Nordisk's Meteoric Rise

Timestamp: 03:18 – 05:06

Novo Nordisk, traditionally known for insulin production, experienced explosive growth with the introduction of Ozempic in 2018. The drug, initially approved for diabetes, gained widespread attention for its weight loss benefits.

Pete Loftus [05:06]: "Last year, their combined sales of just those two drugs were over $26 billion."

The CEO, Lars Jurgensen, who took the helm in 2017, was pivotal in steering the company through this transformative period, achieving a staggering 600% stock price increase until mid-last year.

Jessica Mendoza [04:29]: "...Novo's corporate structure effectively means that its CEO has to answer to the foundation."

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The Competitive Landscape: Eli Lilly Enters the Fray

Timestamp: 06:22 – 08:36

Eli Lilly emerged as Novo Nordisk’s primary competitor in the GLP1 drug category. Following Ozempic’s success, Lilly introduced Mountjaro for type 2 diabetes in 2022 and Zepbound for weight loss in 2023.

Jessica Mendoza [07:16]: "Eli Lilly is their biggest rival and the companies have spent years going back and forth trying to outdo each other."

Zepbound demonstrated superior weight loss capabilities compared to Wegovy, with clinical studies showing weight reduction of 20-25% compared to Wegovy's 15-20%.

Pete Loftus [07:56]: "Eli Lilly's drug, Zepbound has been shown in studies to help people lose more weight than Wegovy."

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Manufacturing Challenges and Market Pressures

Timestamp: 08:36 – 10:40

As demand for Ozempic and Wegovy surged, Novo Nordisk struggled with manufacturing capacity, leading to frequent shortages. These shortages allowed competitors to introduce generic versions, further diluting Novo's market share. Although CEO Jorgensen eventually resolved the manufacturing issues, investor expectations shifted towards the next groundbreaking drug.

Novo Nordisk's next anticipated breakthrough, Cagrosema, aimed to outperform Zepbound by enabling up to 25% weight loss. However, disappointing clinical trial results revealed only a 22% reduction, leading to a significant decline in the company's stock price.

Pete Loftus [10:40]: "It was basically about 22%. But I think the stakes are so high in this industry and among investors that even this small shortfall was a huge disappointment."

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Leadership Shakeup at Novo Nordisk

Timestamp: 10:47 – 14:43

The underperformance of Cagrosema and the competitive pressure from Eli Lilly prompted concerns within the Novo Nordisk foundation, which oversees the company’s strategic decisions. In January, it became evident that Novo Nordisk needed new leadership to navigate these challenges.

After eight years of leading the company to remarkable success, CEO Lars Jorgensen was effectively pushed out. Upon his departure, Novo Nordisk's share price plummeted by 20%, wiping out $100 billion in market capitalization—a rare occurrence for such a large pharmaceutical firm.

Pete Loftus [13:08]: "He has said in interviews that he was surprised, you know, that he's proud of his time there, what he did."

To stabilize the company, Novo Nordisk appointed Lars Sorensen, the former CEO and predecessor to Jorgensen, to the board of directors. Sorensen brings deep institutional knowledge and experience from the early days of Novo's GLP1 drug development.

Pete Loftus [14:21]: "He is coming back to oversee the company's future."

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Insights from Former CEO Lars Sorensen

Timestamp: 14:30 – 15:32

In an interview segment, the returning Lars Sorensen discusses the intense competition between Novo Nordisk and Eli Lilly. He expresses respect for Eli Lilly's advancements and acknowledges that competition drives both companies to innovate continuously.

Lars Sorensen [14:59]: "It's difficult for me to pass judgment on. I think it's about on par."

Sorensen emphasizes that both companies benefit from the rivalry, preventing complacency and fostering ongoing advancements in the GLP1 drug space.

Lars Sorensen [15:12]: "So I think both companies benefit from this very intense competition and so I only welcome it."

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Implications for the Pharmaceutical Industry

Timestamp: 15:32 – 17:08

The leadership turmoil at Novo Nordisk underscores the high-stakes environment within the pharmaceutical industry, especially in breakthrough drug categories like GLP1s. Investors maintain a "what have you done for me lately?" mindset, relentlessly seeking the next major innovation even amidst existing successes.

Pete Loftus [15:59]: "They really highlight the what have you done for me lately? Mindset of investors..."

The broader market anticipates that GLP1 drugs will continue to expand in their applications, with ongoing research suggesting new benefits beyond diabetes and weight loss. Consequently, any setback in this domain is perceived as a significant threat, intensifying pressure on companies like Novo Nordisk to deliver continual advancements.

Pete Loftus [16:47]: "I think it just illustrates how big people think this broad market could become."

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Conclusion

Timestamp: 17:08 – End

The Journal wraps up by reflecting on the rapid evolution within the GLP1 drug market and the high expectations placed on pharmaceutical leaders. Despite Novo Nordisk's remarkable achievements under Jorgensen, the competitive dynamics and unmet expectations for Cagrosema necessitated a leadership change, signaling a period of uncertainty and potential repositioning for the company.

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Notable Quotes:

• Jessica Mendoza [00:08]: "In the world of big pharma, this is the sound of liquid gold."
• Pete Loftus [01:56]: "This was not his choice. He's essentially being pushed out."
• Lars Sorensen [15:12]: "So I think both companies benefit from this very intense competition and so I only welcome it."
• Pete Loftus [10:40]: "It was basically about 22%... a huge disappointment."

Key Takeaways:

• Ozempic's Success: Ozempic and Wegovy have been monumental in transforming Novo Nordisk into a pharmaceutical powerhouse.
• Competitive Pressure: Eli Lilly's aggressive entry with Zepbound has intensified market competition, challenging Novo's dominance.
• Leadership Changes: Disappointing clinical trial results and strategic pressures led to the ousting of long-term CEO Lars Jorgensen.
• Future Outlook: The appointment of former CEO Lars Sorensen signals Novo Nordisk's intent to navigate its challenges with seasoned leadership amid a rapidly evolving pharmaceutical landscape.

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Transcript

[Jessica Mendoza]

In the world of big pharma, this is the sound of liquid gold. An assembly line in Denmark fills glass vials with semaglutide. It's the active ingredient in the injectable drug that's become a bonafide cultural phenomenon. Ho, ho, ho.

[Pete Loftus]

Ozamic.

[Jessica Mendoza]

Where would you say Ozempic ranks in terms of successful drugs that you've covered?

[Pete Loftus]

One of the most successful of all time. It's up there from a financial perspective, but also just from a cultural impact perspective. It's one of the biggest deals. That's rare.

[Jessica Mendoza]

Tell me about the company behind this blockbuster drug.

[Pete Loftus]

Well, the company is Novo Nordisk, which is based in Denmark and they've been around for about 100 years. Most of that time, probably a lot of Americans never heard of it.

[Jessica Mendoza]

Over the last decade, our colleague Pete Loftus has watched Novo Nordisk grow into a pharmaceutical juggernaut. Novo is one of the most valuable companies in Europe by stock market capitalization, thanks to the spectacular success of Ozempic and its sister drug Wegovy.

[Pete Loftus]

Last year, their combined sales of just those two drugs were over $26 billion. For Ozempic, I think it was up about 25% from the year. So on paper, the company is still growing tremendously.

[Jessica Mendoza]

Tremendous growth, strong sales, rising profits. Novo is a success story, which makes the latest news from the company all the more surprising.

[Pete Loftus]

The CEO of Novo Nordisk for the past eight years is leaving the company.

[Jessica Mendoza]

By leaving, do we mean he's resigning? Is he retiring? What's going on?

[Pete Loftus]

This is not part of an orderly plan for him to go spend time on the beach and enjoy retirement. This was not his choice. He's essentially being pushed out.

[Jessica Mendoza]

Welcome to the Journal, our show about money, business and power. I'm Jessica Mendoza. It's Wednesday, May 21st. Coming up on the show, Ozempic is a huge hit. So why is the drug maker CEO out?

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[Jessica Mendoza]

For most of its hundred year history, Novo Nordisk was known mainly as a maker of insulin. Novo's corporate headquarters outside of Copenhagen is even designed to mimic the winding structure of an insulin molecule. The company is also uniquely Danish in its corporate structure.

[Pete Loftus]

It's unusual because it's controlled by a non profit foundation in Denmark. And by Denmark standards, there are actually quite a few of these among their larger companies. And it's essentially a way for Denmark, which you know, is a country that has some socialist aspects to embrace capitalism, but in a way that they feel helps benefit more than just the shareholders of a company.

[Jessica Mendoza]

So Novo Nordisk, the company is overseen by the non profit Novo Nordisk foundation. And it's the foundation that decides how to reinvest some of the company's profits.

[Pete Loftus]

To do things like invest in medical research or life sciences in some way that they feel potentially can help people in the future.

[Jessica Mendoza]

Novo's corporate structure effectively means that its CEO has to answer to the foundation. And since 2017, Novo CEO has been Lars Jurgensen.

[Pete Loftus]

He spent pretty much his entire career at the company. He started out as a health economist, very much a creature of the Novo culture.

[Jessica Mendoza]

And what was his tenure like?

[Pete Loftus]

His tenure, I would say would have been the envy of many CEOs in any industry during that time. The company's stock price, at least until the middle of last year, went up something like 600%.

[Jessica Mendoza]

Well, I see Novo Nordisk putting out the biggest gain. Novo Nordisk is one of the biggest gainers.

[Pete Loftus]

This morning.

[Jessica Mendoza]

Novo Nordisk, yesterday the stock had the best session in about two and a.

[Pete Loftus]

Half years and sales were through the roof.

[Jessica Mendoza]

Ozempic launched in the US in 2018, just about a year after Jorgensen took over as CEO. The drug is approved for treating diabetes, but people quickly realized that the weekly doses didn't just help control blood sugar, they could help control weight. And that's when Ozempic really took off.

[Pete Loftus]

He oversaw this big change at the company where they went from this very reliable supplier of insulin to now having these newer types of drugs to help first treat diabetes and then weight loss.

[Jessica Mendoza]

Right.

[Pete Loftus]

All right.

[Jessica Mendoza]

Have you heard of this so called miracle drug, Ozempic?

[Pete Loftus]

And so it was during his tenure that the company came out with WeGovy around 2021, the same drug, but specifically for weight loss, to a new weight loss drug that helped some people shave.

[Jessica Mendoza]

Off 15% of their weight.

[Pete Loftus]

And that was really like the first significant anti obesity drug to come out in a long time.

[Jessica Mendoza]

Ozempic and Wegovy are what's known as GLP1s now one of the most successful drug categories in the industry. Novo's biggest challenger in the space is an American company, one that it's competed with for something like a century. Eli Lilly. Welcome to Lilly, where every day we turn groundbreaking discoveries into life changing medicines that impact millions of.

[Pete Loftus]

So Eli Lilly is their biggest rival and the companies have spent years going back and forth trying to outdo each other. And Eli Lilly also has a similar past in the sense that they were essentially the earliest supplier of insulin in the US 100 years ago. And that remains a big part of their business. But where the competition really ratcheted up was the discovery of of these GLP1 drugs.

[Jessica Mendoza]

What did that look like post Ozempic?

[Pete Loftus]

Post Ozempic? What that looked like was Lilly trying to really speed things up, to get their answer out there, to try to find something even better. And their answer was not just to come out with another GLP1 drug, but to come out with one that has a more powerful effect.

[Jessica Mendoza]

The result would be a blockbuster for Eli Lilly. When the Indiana company presented early data of its new drug at a medical meeting, one specialist made a bold prediction.

[Pete Loftus]

That while Ozempic was the gorilla of GLP1s, that what Eli Lilly is doing was the king Kong of GLP1s.

[Jessica Mendoza]

OK. In 2022, Lilly released its answer to Ozempic Mountjaro, Approved for type 2 diabetes. The following year, the company came out with its answer to Wegovy. Lilly called its weight loss drug Zepbound.

[Pete Loftus]

Eli Lilly's drug, Zepbound has been shown in studies to help people lose more weight than Wegovy. So we're talking between 20 to 25% of someone's body weight compared with, you know, 15 to 20% for WeGovy. And so that's been Eli Lilly going out there and saying, novo, that's great what you did, but we think we have something better.

[Jessica Mendoza]

Soon, Novo CEO Lars Jurgensen saw his company's lead slipping. Not only was Novo's old rival eating up market share, Novo also found itself struggling to keep up with demand. The company just didn't have manufacturing capacity to produce Ozempic and Wegovy fast enough. And shortages became common, which also opened the way for knockoff versions of the drugs to further erode Novo's market share. Jurgensen eventually resolved the manufacturing problem. But what investors were really after was the next breakthrough, the next Ozempic.

[Pete Loftus]

Novo Nordisk has been developing its own combination drug that they call Cagrosema. And this was something that Novo Nordisk itself, as well as investors, were really counting on.

[Jessica Mendoza]

By then, the end of 2024 was approaching and Novo was hyping up Cagresima as its new breakthrough drug. It just needed to prove it with a major clinical trial. That's Novo Nordisk needed a big win, and its CEO, Lars Jurgensen, was hoping that Cagresima, a drug they'd been developing to treat obesity and type 2 diabetes, would be able to deliver for. Our confidence in the Cargresima molecule is very, very high.

[Pete Loftus]

Good to hear, Marcin. Very encouraging.

[Jessica Mendoza]

The hope was that Cagresema would be even more effective for weight loss than Eli Lilly's Zeppbound.

[Pete Loftus]

And so Novo Nordisk had set this expectation that this potential new drug could help people lose 25% of their body weight, which would be a higher bar than what Zepbound has shown for the most part.

[Jessica Mendoza]

But when the data from the clinical.

[Pete Loftus]

Trial came out, it just wasn't as good as expected.

[Jessica Mendoza]

Shares of Novo Nordisk plunging by the most on record today after disappointing data from its experimental obesity drug.

[Pete Loftus]

It was basically about 22%. But I think the stakes are so high in this industry and among investors that even this small shortfall was a huge disappointment. In a single day in December, Novo Nordisk's share price dropped 20% and it cut $100 billion worth off their market cap.

[Jessica Mendoza]

Wow.

[Pete Loftus]

And you just don't see that very often for a large pharmaceutical company.

[Jessica Mendoza]

It's pretty incredible to think, you know, a few years ago, the idea of a drug being able to reliably help people lose up to 15% of their body weight was unthinkable. And now they're like, oh, only 22%. Sorry. Like, that's mind blowing.

[Pete Loftus]

Well, one thing I've learned is that investors get used to things pretty quickly, and they want the next thing pretty soon.

[Jessica Mendoza]

The Novo Nordisk foundation, the nonprofit running Novo Nordisk, the company started to have concerns over their ability to keep pace with Eli Lilly. And in January, those fears became a reality. New data showed that US Prescriptions for Lilly Zepbound had beaten Novo's Wegovy for.

[Pete Loftus]

The first time by pharmaceutical industry standards. That's a pretty fast ramp. Zepbound came out at the end of 2023, and in just a year, it was able to take the top spot from Wegovy. And so at some point in the last several weeks, the chair of the Novo Nordisk foundation expressed his concerns to the board of of directors of the drug company. And that began a discussion that they should speed up their timelines for a CEO transition.

[Jessica Mendoza]

And so, after eight years of leading Novo and helping it become one of the most profitable drug makers in the world, Jurgensen's time was up. Last Friday, the company announced that the CEO was leaving. Given the circumstances V and largely Hugo Jorgensen have concluded that it is in.

[Lars Sorensen]

The best interest of the company that.

[Jessica Mendoza]

He steps down, which is what we have announced today. Has Jorgensen himself said anything about the decision?

[Pete Loftus]

I mean, he has said in interviews that he was surprised, you know, that he's proud of his time there, what he did.

[Jessica Mendoza]

After the announcement, Novo employees gathered to cheer on their departing boss as he descended a winding staircase at the company's headquarters. With Jurgensen headed for the exit, the company announced it would bring back someone with deep institutional knowledge.

[Pete Loftus]

A previous CEO joining the Novo Nordisk Drugmaker board of directors will be the old Lars. Lars Sorensen. The former CEO and the outgoing CEO of are both named Lars. So it's a case of out with the new Lars, in with the old Lars.

[Jessica Mendoza]

The old Lars, Lars Sorensen was actually Lars Jurgensen's predecessor. Sorensen was CEO at the time when Novo was just beginning to set the stage for its GLP1 success. Now he'll be returning to oversee the company's future.

[Pete Loftus]

So he's not coming back as CEO. I should make that clear. But he is coming back to the drugmakers board of directors.

[Jessica Mendoza]

Novo Nordisk says it won't be changing its strategy, despite the shakeups at the top.

[Lars Sorensen]

Thank you. I am on the headphones now, so.

[Jessica Mendoza]

Well, thank you for being here and being so patient with all of our tech stuff.

[Lars Sorensen]

Oh, well, it's.

[Jessica Mendoza]

Last year I interviewed Lars Sorensen, the returning Lars, for our series Trillion Dollar Shot, which is about the rise of GLP1 drugs. At the time, I asked him about Novo's rivalry with Eli Lilly. Who would you say is winning the competition right now?

[Lars Sorensen]

It's difficult for me to pass judgment on. I think it's about on par.

[Jessica Mendoza]

Sorensen told me he had the highest respect for Eli Lilly and that they keep each other on their toes.

[Lars Sorensen]

So I think both companies benefit from this very intense competition and so I only welcome it. I would have been more worried if we didn't have competition, because then there's always the risks. That complacency sets in.

[Jessica Mendoza]

We asked the foundation yesterday if Sorensen still welcomes the competition. The foundation had no further comment. In the meantime, both Novo and Lilly are pressing on with the next big thing. Promises of more effective injectables, a more convenient pill, and even more weight loss. What does this leadership shakeup sort of say about the pharmaceutical industry right now? Like, especially in the weight loss space?

[Pete Loftus]

Yeah, they really highlight the what have you done for me lately? Mindset of investors so even though objectively on paper, Novo Nordisk has been phenomenally successful, investors are so focused on the future, so that's one thing. But I would also say it just illustrates how big people think this broad market could become. Really, it's on a trajectory to just be one of the biggest of all time. These GLP1 type drugs work not only for diabetes and weight loss, but it seems like with each passing week there's some piece of information, a study or whatever, that seems to suggest some new benefit.

[Jessica Mendoza]

Right.

[Pete Loftus]

And so I think any sort of setback is kind of viewed as a threat and could lead to something like what we're seeing.

[Jessica Mendoza]

That's all for today. Wednesday, May 21. The Journal is a of Spotify and the Wall Street Journal. Additional reporting in this episode from Dominic Chopping. Additional production from Adrienne Marie Nielsen. Thanks for listening. See you tomorrow.