U.S.-listed shares of Danish pharmaceutical giant Novo Nordisk (NYSE:NVO) surged today following reports that activist investor Parvus Asset Management is accumulating a stake in the company, with intentions to influence the selection of its next CEO.
The news comes at a critical juncture for Novo Nordisk, which has seen its share value nearly halved in the past year amidst slowing sales growth for its blockbuster weight-loss drugs, Ozempic and Wegovy, and increasing competition from rivals.
According to a Monday report by the Financial Times, citing sources familiar with the matter, Parvus Asset Management has been acquiring shares in Novo Nordisk and aims to play a role in identifying a successor to outgoing CEO Lars Fruergaard Jørgensen.
While the exact size of Parvus's stake remains undisclosed as it is below the 5% legal disclosure threshold under Danish law, their reported interest underscores growing investor scrutiny of the company's strategic direction.
Novo Nordisk announced last month that CEO Lars Fruergaard Jørgensen would step down once a successor is found.
This decision followed a cut to the company's full-year sales and profit forecasts, a move attributed to lower-than-anticipated branded GLP-1 penetration, partly due to the rapid expansion of compounded versions of its drugs in the U.S.
The pharmaceutical landscape for weight-loss drugs has become increasingly competitive.
While Ozempic and Wegovy have been market leaders, Eli Lilly's rival drugs, Mounjaro and Zepbound, have shown promising data, with studies indicating they may be more effective for weight loss.
This intensified competition, coupled with the impact of compounded alternatives, has put pressure on Novo Nordisk's sales growth.