Danish pharmaceutical giant Novo Nordisk on Tuesday named its new CEO while simultaneously slashing its full-year guidance, citing weaker growth expectations for its blockbuster Wegovy obesity drug in the key U.S. market.
The drug maker said company veteran Maziar Mike Doustdar would take over as president and CEO following the surprise ousting in May of Lars Fruergaard Jørgensen. The appointment is effective Aug. 7.
Shares fell as much as 26% before paring losses slightly to close down 23% by 4:30 p.m. London time (11:26 a.m. ET).
The company said it now expects full-year sales growth of 8% to 14% at constant exchange rates, down from a prior target of 13% to 21%.
It expects annual operating profit growth of 10% to 16% versus the previously estimated target of 16% to 24%, also at constant exchange rates.
Novo Nordisk said Tuesday that the lower outlook was driven by weaker second-half U.S. sales growth forecasts for its Wegovy weight loss drug and Ozempic diabetes treatment.
"For Wegovy in the US, the sales outlook reflects the persistent use of compounded GLP-1s, slower-than-expected market expansion and competition," it added in a statement.
It comes after the company previously downgraded its 2025 outlook in May, as it reported lower-than-expected first-quarter sales. The company is due to report its full second-quarter sales on Aug. 6.
Doustdar, who joined Novo Nordisk in 1992, has held several executive functions across Europe and Asia, serving most recently as executive vice president of international operations.
In a statement accompanying the announcement, Chairman Helge Lund described Mike Doustdar as "the best person to lead Novo Nordisk through its next growth phase."
"I come to this role with a sense of urgency, a laser focus on high performance, and a fierce determination for Novo Nordisk to aim higher than it's ever done, and to deliver to many more patients the innovation they need," Doustdar added.
The Copenhagen, Denmark-headquartered pharma giant has been battling softer U.S. Wegovy sales as competition from compounded drug makers ramped up in the wake of a Food and Drug Administration drug shortage ruling.
Its share price has shed over 42% this year.
It nevertheless previously said that it expected those pressures to ease in the second half of the year as the availability of copycat drugs was phased out.
Meantime, the firm has struggled to shake negative sentiment following a series of disappointing trial results for its next-generation obesity drug candidate CagriSema amid increased market competition.
