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

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.

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."

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."

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."

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."

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."

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."

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.

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.

For more in-depth coverage and related stories, visit The Wall Street Journal & Gimlet's Merch Store.