Novo Nordisk chair touts OTC future for Wegovy as top investor tightens grip

COPENHAGEN (Reuters) -Newly-elected chairman of Wegovy-maker Novo Nordisk, Lars Rebien Sorensen, said on Friday he plans to enhance the board’s pharmaceutical and over-the-counter experience following a board overhaul at an extraordinary shareholder meeting.

The shake-up, concluded on Friday, handed unprecedented power to the Novo Nordisk Foundation, sparking protests from some minority investors over governance concerns. The foundation wields 77% of Novo’s voting rights, despite owning only about 28% of its share capital.

Sorensen, who chairs the Foundation, was installed as new Novo Nordisk chair during the meeting, giving him a dual role unprecedented in the firm’s history and raising concerns about him amassing too much power.

“I would like to make myself redundant as quickly as possible,” said Sorensen, a former CEO of Novo Nordisk, adding that the foundation would resume operating at arm’s length from the company once a successor is elected. He plans to stay in the role no more than 2-3 years, he said.

The restructuring follows the abrupt resignation last month of former chairman Helge Lund and other independent board members, who stepped down citing disagreements with the foundation over governance principles. Sorensen said the Foundation sought greater changes to stabilize the company and ensure long-term growth.

While the revamped board secured over 90% approval at the meeting, some key minority shareholders either protested or abstained, citing fears of excessive consolidation of decision-making power under Sorensen’s dual role.

FOCUS ON PHARMA AND CONSUMER MODELS

Sorensen emphasized his desire to bring in board members with recent pharmaceutical or over-the-counter (OTC) experience, particularly as the company shifts toward a direct-to-consumer, cash-paying model.

“We would like to strengthen the board with some qualifications, preferably with recent pharma experience, perhaps even OTC experience,” he said.

The company has faced challenges, including slowing sales growth for Wegovy, its blockbuster obesity drug that last year helped Novo Nordisk become Europe’s most valuable firm.

Competition from Eli Lilly and compounding pharmacies, coupled with supply constraints, has eroded Novo’s first-mover advantage in the weight-loss market.

Sorensen has criticised the old board for not acting quickly enough to stem the decline in its key U.S. market. He pushed over the summer to speed up the naming of a new CEO, Mike Doustdar, who is spearheading a tough round of layoffs globally, and entered a dramatic bidding war for Metsera, though lost out to Pfizer.

“The new Novo is more raw. All the execution that has been lacking for many years is now happening in no time, and we should probably expect more to come,” said Lars Hytting, head of trading at Denmark-based ArthaScope, which holds Novo shares.

Sorensen’s dual role is seen as a test of the foundation-ownership model designed to provide stability and used by other big Danish firms like Maersk and Carlsberg.

(Reporting by Jacob Gronholt-Pedersen, Stine Jacobsen and Louise Rasmussen, editing by Terje Solsvik and Elaine Hardcastle and Louise Heavens)