Good day, and thank you for standing by. Welcome to the Changes to Novo Nordisk Executive Leadership and Board of Directors conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press *11 on your telephone. You will then hear an automated message advising your hand is raised. To answer your question, please press *11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jakob Wulff, Head of Investor Relations. Please go ahead.
Thank you, and welcome to this Novo Nordisk call regarding the changes to Novo Nordisk Executive Leadership and Board of Directors that we have announced today. My name is Jakob Wulff, and I'm the Head of Investor Relations at Novo Nordisk. With me today, I have Helge Lund, Chair of the Board of Directors of Novo Nordisk. Today's announcement is available on our website, novonordisk.com. Please note that the call is being webcast live, and a recording will be made available at our website as well. The call is scheduled to last for a maximum of 30 minutes. We need to advise you that this call will contain forward-looking statements. These are subject to risk and uncertainty that could cause actual results to differ materially from expectations.
For further information on forward-looking statements and risk factors, please see the company announcement for the first three months of 2025, which was only released on May 7. With that, over to you, Helge, for a review of today's announcement.
Thank you, Jakob, and thank you to everyone for calling in. We have today announced two changes to Novo Nordisk Executive Leadership and Board of Directors. As per mutual agreement with the Novo Nordisk board, Lars Fruergaard Jørgensen will step down from his role as the CEO of Novo Nordisk. He will continue as CEO for a period to support a smooth transition to new leadership. Furthermore, the Novo Nordisk board has agreed with the Novo Nordisk Foundation board that Lars Rebien Sørensen, Chair of the Novo Nordisk Foundation, as of today, will participate as an observer in Novo Nordisk's board meetings. This is with the intention that he be nominated for election as a board member at the annual general meeting in 2026. As I'm sure you know, the Novo Nordisk Foundation, through its investment company Novo Holdings A/S, is the majority shareholder of Novo Nordisk.
The changes are made on the background of the market challenges Novo Nordisk has been facing recently and the development of the company's share price since mid-2024. In light hereof, the Novo Nordisk Foundation board initiated a dialogue with the Novo Nordisk board on the merits of an accelerated CEO succession and expressed a wish to increase its representation on the Novo Nordisk board. Following this dialogue, the Novo Nordisk board and Lars Fruergaard Jørgensen has, after careful consideration of the wishes from our main shareholder, decided at the board meeting today to make the mentioned changes. As regards the CEO change, the Novo Nordisk board has until now been working with a different CEO succession timeline that did not call for an imminent change.
However, given the circumstances, we and Lars Fruergaard Jørgensen have concluded that it is in the best interest of the company that he steps down, which is what we have announced today. He will, as I mentioned earlier, continue as CEO for a period to support a smooth transition to new leadership. Therefore, we are not at this point ready to announce a successor to Lars Fruergaard Jørgensen. Succession planning is not an event; it is an ongoing process, including both internal and external candidates. Given the decision for Lars Fruergaard Jørgensen to step down and considering the nature of the accelerated succession process ahead, we inform the market now. This means that I will not offer any suggestions for when a new CEO will be appointed, but just say that we have accelerated our ongoing succession process and will make an announcement in due course.
The other change we announced today concerns the board of directors. I would like to welcome Lars Rebien Sørensen as an observer to the board. He knows the company very well, and Lars Rebien Sørensen has extensive first-hand experience of the pharmaceutical industry and the environments in which it operates from his 16 years as a CEO of Novo Nordisk. His experience will be valuable for the board, and we look forward to working with him initially as an observer. An announcement like the one we have made today will, of course, raise questions about whether they imply changes to the company's current plans and strategies and how the company will manage in the period until the new CEO is in place.
Let me say this: Novo Nordisk's strategy remains unchanged, as do the plans and initiatives we presented last week in connection with our first quarter financial announcement. The plans have the board's full support, and we are confident in the company's ability to execute on those plans, also in the period until a new CEO is in place. Thank you, Jakob, and back to you.
Thank you, Helge. With that, we are now ready to take the first question. This time around, I will allow for one question and remind that the purpose of this call is on today's announcement and only today's announcement, please. Thank you.
Thank you. As a reminder, if you wish to ask a question, please press *11. We will now take the first question from the line of Sachin Jain from Bank of America. Please go ahead.
Hi there. Thanks for my question. Could you just discuss what profile of candidate you're looking for, and could you clarify whether the guidance still stands? You said the plans are supported by the board, but you didn't officially say the guidance still stands. Thank you.
There are no changes to the guidance that were given at the first quarter. When it comes to the profile of the new CEO, that is a focus of the succession committee and the board, and we do not, and we will keep that to ourselves until we are ready to make the announcement. Thank you.
Thanks a lot, Sachin. I think with that, we are ready to move to the next question, please.
Thank you. The next question is from the line of Carsten Egeriis from Danske Bank. Please go ahead.
Yep. Thank you very much for taking this question. Just the last time I looked, I think Novo Nordisk has had five CEOs in 100 years, and Lars is now stepping down after only eight years. In the release, you write that it's market challenges and the share price decline, which doesn't really feel like something, at least the share price decline, is not exactly something he can control. I was wondering if you can give us some more details on what exactly has driven this change right now, because it seems like a very big thing.
As we said in our release earlier, the changes are made in the context of the recent market challenges and the recent share price decline, as well as a wish from our main majority owner to accelerate the CEO succession process. Taking those considerations into account, the board has determined that the best interest of the company is to announce the change of a CEO today.
This is something that has been going on since mid-2024, right? I'm sure there are many on this call that have covered Novo for a very, very long time. The way we know Novo is that normally you have patience when you're on the right track, and then you kind of let things move in the right direction once you have the strategy right. It just feels like there's something that's gone pretty wrong here.
We have a clear strategy, and that remains unchanged. We have a strong product portfolio with lots of potential. We have an experienced executive team to continue to evolve and drive the company forward with a long-term perspective. What drove the decision now was a combination of the recent market challenges, the share price decline, as well as an expression from our main owners to accelerate the CEO succession process. There is nothing more behind this.
Thank you, Carsten.
Thank you,
and thank you, Helge. We are ready for the next question, please.
Thank you. The next question is from the line of Michael Novod from Nordea. Please go ahead.
Thank you very much. Another question to the guide, as you say, is standing, but is there anything on sort of pipeline strategy that has also accelerated the wish from the Novo Nordisk Foundation to accelerate this CEO succession?
As I said, I referred to what I said earlier on the call. There is nothing more than I indicated earlier, these three factors: the recent market challenges, the share price decline, as well as the wish from the foundation. The company has a strong product portfolio, a strong pipeline that creates a very strong basis for taking the opportunities in a large growing market with significant unmet need.
Thanks a lot, Helge, and also thanks to you, Michael. I think with that, we are ready to take the next question, please.
Thank you. The next question comes from the line of Richard Vosser from JP Morgan. Please go ahead.
Hi, thanks for taking my question. Just wanted to ask what Lars Rebien Sørensen brings exactly to the board. Obviously, he has a lot of experience during the insulin days and the early days of GLP-1, but what skills does the Novo Nordisk Foundation think that he will add to the board? Aligned to that, do you think you need more consumer experience on the board given the overlap of obesity with medical prescribing and consumerism? Thanks very much.
Thank you, Richard, for your question. Of course, Lars Rebien Sørensen knows the company very, very well and has extensive first-hand experience of the pharmaceutical industry and also the environments in which he operates from his 16 years as CEO of Novo Nordisk. The Novo Nordisk board will definitely benefit from his capabilities and experience. You may recall, Richard, that a couple of years back, we recruited a new member to the board of Novo Nordisk, Christine Low. She has her entire career in fast-moving consumer goods and has been a fantastic addition to our board. We will continue to review the composition of the board as we move forward. Your question is definitely relevant.
Thank you, Helge, and also thank you for the question. Let's move on to the next question, please.
Thank you. The next question comes from the line of Peter Verdult from BNP Paribas. Please go ahead.
Thank you, Peter Verdult, BNP. Sorry to test your patience, but I just want to just delve a little bit more into the timing of this announcement. I mean, we were all with management last week. A clear strategy has been laid out to try and reverse Novo Nordisk's fortunes. Should we infer that this decision is some sort of signal that the board does not believe in the strategy or it is a reaction to some of the recent moves being made by Novo Nordisk as it relates to telehealth and the CVS deal? I just want to just, sorry to, as I said, test your patience, but I just want to understand better the timing of the deal, the timing of the move. Thank you.
No, thank you, Peter. I just wanted to reiterate that Novo Nordisk's strategy remains unchanged, and the board is confident that the current business plans and its ability, the organization's ability to deliver on those plans. I can assure you that the plans have been extensively discussed with the board of directors, and the plans have the full support of the company.
Thank you.
Thanks, Helge, and also thanks to you, Peter. We will take the next question, please.
Thank you. Next question comes from the line of Simon Baker from Redburn Atlantic. Please go ahead.
Thank you for taking my question. Just another one on the strategy. You said that the strategy, as it stands, is intact and unchanged. I'm just wondering, given that the board clearly thinks that some change needs to be made in the future on the appointment of a new CEO, does the board envisage there being a significant change to strategy, or is this more a case of changing execution on the existing plan? Any color you can give there would be most helpful. Thank you.
Thank you, Simon. We do not envision a significant strategy change in the company, as I've already said. The strategy is unchanged. The plan that we're executing now will not change. Of course, over time, when the market is developing, the industry is developing, of course, the new CEO will also continue to evolve and adapt the strategy to the prevailing sort of environment. This is not an announcement about the strategy change. This is an announcement about that Lars is stepping down and that we have Lars Rebien Sørensen coming onto the board of the company. That is the framework for this conversation.
Thanks so much.
Perfect. Thanks so much to you as well, Simon. Thank you, Helge. We will jump to the next question, please.
Thank you. Next question from the line of Harry Sephton from UBS. Please go ahead.
Brilliant. Thank you. This announcement follows what has already been a number of changes at the senior management level with Doug and Camilla also recently stepping down. What do you think has been lacking from Novo Nordisk leadership, and do you think you need to look externally for experience to address those shortcomings? Thank you.
There is no linkages between the announcements that you're referring to. This is only about Lars Jørgensen and the board's decision that he steps down, given what I talked about earlier, and changes to the board. We have a strong and experienced leadership team that is fully focused on executing on our plan, and also largely support that in the next coming transition period. Of course, Novo Nordisk is primarily developing and promoting leaders from within, but we have also successfully recruited very strong talent from the outside of the company, and that will continue.
Thank you for that answer, Helge. Thank you for the question. Let's move on to the next one in line, please.
Thank you. Next question comes from the line of Michael Thomas Nedelcovych from TD Cowen. Please go ahead.
Thank you for the question. You have been very clear that there is no change to the current strategy. I am curious if there was any disagreement as to how one might envision what Novo Nordisk looks like in 10, 20, or 30 years, and if perhaps that played into this decision. This is probably a reach, but it is interesting that this announcement comes on the heels of the small molecule partnership, which one could consider already something of a departure from Novo Nordisk's strategic history. Thank you.
We have had very extensive strategy discussions over the past few years, and we have communicated the framework of our strategy and our strategic aspirations to the market, and there is no change to that. The company is fully focused, and the board is fully focused on delivering on those. Also, Michael, there is no connection to the deal that we announced earlier this week on small molecule technologies.
Thank you. Thank you, Helge. Thanks to you as well, Michael. We have time for a few more, so let's move to the next question, please.
Thank you. Next question from the line of Evan Seigerman from BMO Capital Markets. Please go ahead.
Hello, this is Conor Caillon for Evan. Thanks for taking our question. With the CEO transition still expected to take several months, can you maybe walk us through a bit on how Novo can work to drive continuity and not secede ground to competitors in the endocrine market during this time of transition? Thank you.
Lars has the full support of the board, the full support of the foundation in terms of taking the company forward and leading the company in the transition period. We have a very strong leadership team which are focusing on delivering on the plan. There are no discontinuities in the way we execute on the plan for the next few months.
That's clear. Thank you, Helge. Thank you for the question. Next set of questions, please, or next question, please.
Thank you. Next question is from the line of Kerry Holford from Berenberg. Please go ahead.
Thank you for taking the question. I would just be interested to hear whether a CEO transition plan was already in place. Was this already something you were considering this year? A quick follow-up in the context of the surprise announcement today. I wonder if you can just provide the assurance on CagriSema, the upcoming data presentations at ADA, and whether you will host an investor event at that conference.
Thank you for the question, Kerry. I think Jakob can take the second question. I just wanted to underline that a succession process, that's a process and not an event. I can assure you that we are working diligently with succession at all levels of the company, including at the CEO level. This is an ongoing process where we are looking at internal as well as external candidates. The announcement this morning is about accelerating that process and building on the work that we have done so far.
On the second one, thank you, Kerry. Given the focus of today's call is on today's announcement, a colleague from the investor relations team will follow up with you separately. Thanks a lot. With that, we are ready for the next question, please.
Thank you. The next question comes from the line of James Quigley from Goldman Sachs. Please go ahead.
Hello, thank you for taking my question. I have got one on what the goal is for the foundation to add another member to the board. Is this specific to the skill set that Lars Rebien Sørensen is going to bring to the board? Is it something that they felt was missing either from a communication or a shareholder alignment point of view? Just any thoughts there on what the goal of adding another Novo or adding a further Novo Foundation representative to the board is? Thank you.
No, thank you, James. The most important starting point, I think, for the board is that the board is an independent board with the majority members that are independent. The board concluded after a dialogue with the foundation that Lars has experience from the company as well as from the industry that can add value to the discussions in the Novo board, first as an observer, but subsequently, the intention is that he will be nominated as a board member also in AGM 2026, and we expect him to engage on the full spectrum of board matters and on the board agenda.
Thank you, Helge, and thank you, James. We have time for two more questions, so let's move to the second last question, please.
Thank you. Next question comes from the line of Rajesh Kumar from HSBC. Please go ahead.
Hi. Good afternoon. Thanks for taking my question. If I understand correctly, your strategy is unchanged. Your guidance is in place. The main reason for the change is what happened to the share price and communication. The first part of the question is, what could have been done different in the past, which you'll focus on in the future? The second, are there any other organizational changes that are happening along with the CEO succession?
Just to go back to what I said earlier, the reason for this is based on recent market challenges, share price sort of decline over the past six months or so, as well as a request and a wish from the foundation of an accelerated succession process. That is the basis on which the board has made its decision. An organization is an organism. It changes and evolves all the time, and we do that as well as at Novo Nordisk, but there are no significant changes that I think are relevant to report to investors at this stage beyond what we have communicated over the past few months on changes in the executive leadership team.
Thanks, Helge. Thanks to you, Rajesh. Let's move to the final question, please.
Thank you. Final question comes from the line of Seamus Fernandez from Guggenheim Securities. Please go ahead.
Oh, thanks for the question, and I'm sorry to belabor the point, but I have to say I'm confused by the discussion. If I were the next potential CEO of Novo Nordisk, I would be very nervous to take the role if the senior shareholder, Novo Holdings, and the stock goes down another 30%, that I could lose that job relatively quickly. Just trying to get a better sense of exactly what's going on here, it just seems a little bit confusing and a little bit more reactive to a single shareholder than one might expect of Novo historically. Thanks.
The governance of the company will not change as a result of Lars Rebien Sørensen joining the board, and the CEO is accountable to the entire board, and that has been the case in this case too. Based on the development that we talked about earlier and the wish from the foundation, the board has had a discussion and concluded that this is in the best interest of the company, and it's about an accelerated CEO succession process. I also refer to the fact that Lars has been more than eight years in role already. There is nothing more behind this.
Good. We are ready to close for the questions. Before rounding off, I'll hand it over to you, Helge, for a few final remarks.
Yeah, can I just say that Novo Nordisk is a well-run company with a clear strategy and a strong pipeline, also a strong portfolio of products. The experienced leadership team will continue to manage the business and execute on the strategy presented a few weeks back together with Lars Fruergaard Jørgensen. On behalf of the board, I would like to thank Lars Fruergaard Jørgensen for his outstanding contribution to Novo Nordisk's success during his tenure as CEO, both inside and outside the company. He's highly respected for his leadership, his values, and vision for the company and the pharmaceutical industry at large. Before I close, it's important for me to make it absolutely clear that although the decisions we have announced today are made following a dialogue we had with the company's majority shareholder, we have taken all shareholders' interests into account in our decisions.
Novo Nordisk board, of course, takes full ownership of the decisions, and we firmly believe that the changes announced today are in the best interest of the company and all its shareholders. With that, Jakob, thank you, and back to you.
Those were the final remarks. Thank you, everyone, for calling in, and have a good weekend when you get there. Thank you. Bye.
This concludes today's conference call. Thank you for participating. You may now disconnect.