{"id":174151,"date":"2025-09-28T02:12:20","date_gmt":"2025-09-28T02:12:20","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/174151\/"},"modified":"2025-09-28T02:12:20","modified_gmt":"2025-09-28T02:12:20","slug":"novo-nordisks-new-chief-cuts-9000-jobs-business","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/174151\/","title":{"rendered":"Novo Nordisk\u2019s new chief cuts 9000 jobs | Business"},"content":{"rendered":"

Novo Nordisk is cutting 9000 jobs<\/a> with the intention of saving around DKK8 billion (\u00a31 billion) in annual costs, capping a turbulent year for the Danish pharma firm. The opinion of investors had darkened over the past year, after Novo struggled to meet demand for its obesity drug, lost market share to rival Eli Lilly and came under pressure from compounding pharmacies selling versions of its products in the US.<\/p>\n

\"Novo<\/p>\n

Novo was predominantly known internationally for its insulin products, until it began selling semaglutide in 2018 \u2013 branded as Ozempic for diabetes, then branded as Wegovy for weight management in 2021. Novo had first mover advantage on a new kind of drug that mimics the metabolic hormone glucagon-like peptide-1 (GLP-1), which regulates blood sugar and appetite. Ozempic became a household name, with speculation around which celebrities were taking it for weight loss creating social media buzz.<\/p>\n

Demand ballooned beyond what the company or market watchers had predicted. \u2018In 2023, we realised that the demand was going to be significantly higher for obesity drugs. We\u2019ve tripled the estimated market since 2020 and now talk about $120\u2013150 billion, not $80 billion,\u2019 says Rajesh Kumar<\/a>, head of european life sciences & healthcare equity research at HSBC bank.<\/p>\n

<\/p>\n

Eli Lilly saw the pitfalls that Novo had already encountered and was more prepared to evade them<\/p>\n

<\/p>\n

The US Food and Drug Administration (FDA) placed semaglutide on its drug shortage list in 2022, allowing compounding pharmacies to legally sell their own formulations<\/a>. Novo restricted the starter doses of Wegovy in 2023 as demand outstripped manufacturing, and problems arose with counterfeits.<\/p>\n

Meanwhile, in 2022, Eli Lilly launched tirzepatide \u2013 initially for diabetes (as Mounjaro) and the following year as Zepbound for obesity. Tirzepatide also spent two years on the FDA\u2019s official shortage list, but Lilly\u2019s manufacturing investments ended that shortage several months before that of semaglutide. New prescriptions for Lilly\u2019s Zepbound reportedly surged past Wegovy in the US this year. \u2018Lilly had what I call second mover\u2019s advantage,\u2019 says Kumar: it saw the pitfalls that Novo had already encountered and was more prepared to evade them.<\/p>\n

Unfortunately for Novo, after the official shortages ended, compounders have continued fighting to retain their rights to produce GLP-1 drugs. \u2018Three million people in the US currently take these medications. Two million are on Lilly or Novo\u2019s drugs. One million are on compounded versions,\u2019 says Kumar.<\/p>\n

Although prescription data points to a 60:40 split between semaglutide and tirzepatide medicines, Kumar says that this misses the fact that the vast majority of compounded drugs are semaglutide, meaning Novo\u2019s share is much smaller. \u2018Compounders tasted an opportunity and there was an influx of API from China and other parts of the world that are not regulated in the same way,\u2019 he adds. Novo is fighting compounders in multiple lawsuits.<\/p>\n

Transformation<\/p>\n

Novo Nordisk issued sales and profit warnings in July, and its share price was hammered, losing 20% or more in a single day. It had already surprised analysts by pushing out Lars Fruergaard J\u00f8rgensen as chief executive in May. \u2018This was a complete shock,\u2019 says Hanne Sindb\u00e6k<\/a>, Danish author of two books on Novo Nordisk.<\/p>\n

<\/p>\n

This is the largest job loss in Danish history. But if you compare it to the number [Novo] hired last year, it is not so dramatic<\/p>\n

<\/p>\n

The company had prided itself on consistency. \u2018When I spoke to the former [chief executive], he mentioned several times that Novo Nordisk is marked by continuity in terms of values, technologies and markets,\u2019 says Martin Jes Iversen<\/a>, a professor of innovation at Copenhagen Business School in Denmark. \u2018Yet the reality is that Novo has faced a transformation.\u2019 Novo had to move from insulin for diabetic patients to a consumer market for obesity treatments.<\/p>\n

Lilly began selling Zepbound direct to consumers<\/a> and packaged drugs in vials with syringes instead of more expensive prefilled pens. It took Novo more time to set up a direct line to consumers. \u2018This was a completely new market,\u2019 says Sindb\u00e6k. \u2018Novo sold its medicine via doctors and hospitals and did not think of itself as selling to consumers.\u2019<\/p>\n

In August, Mike Doustdar<\/a> was appointed the new chief executive. The job cuts he announced in September \u2018sends out a very strong message about cost cutting,\u2019 says Kumar. Around 5000 of the 9000 job cuts are expected in Denmark. \u2018This is the largest job loss in Danish history,\u2019 says Iversen, a setback for many families. \u2018But if you compare it to the number of employees [Novo] hired last year, it is not so dramatic.\u2019<\/p>\n

Novo employed around 78,000 people at the end of August 2025, an 80% increase from just five years ago. \u2018They had far too many employees. That\u2019s what happens when you grow so quickly,\u2019 says Sindb\u00e6k, who believes there was employee acceptance of the restructuring plan, partially because Doustdar has been at Novo for over 30 years. \u2018This person knows the company and its culture,\u2019 says Iversen. \u2018I\u2019d have been sceptical if it was someone from the outside.\u2019<\/p>\n

Change in strategy<\/p>\n

Novo\u2019s loss of market share means it now has more supply than demand, says Kumar. The bottleneck is convincing insurers and healthcare providers to pay. Despite assessments suggesting the drugs represent good value for money \u2013 particularly if additional benefits like lowering the risk of cardiovascular and other diseases are factored in, at current prices they are still too costly for healthcare systems to provide them to all potential patients. Novo will therefore be under pressure to drop its prices. Semaglutide is scheduled for US federal price negotiations in 2027 under a mechanism<\/a> introduced by the Biden administration. Novo\u2019s patents in various countries will also begin to expire from 2028, opening the drug to generic competition.<\/p>\n

However, in terms of the drugs\u2019 performance, Kumar is optimistic about Novo\u2019s prospects. A head-to-head study<\/a> (from Lilly<\/a>) published earlier this year suggested tirzepatide was superior to semaglutide in reducing body weight and waist girth. However, Kumar points out that over 85% of trial patients took the highest dose of tirzepatide. \u2018In the real world, only a third of patients are going to the highest dose.\u2019\u00a0<\/p>\n

Both companies have follow-up drugs in their pipelines, exploring both oral<\/a> and injectable<\/a> treatments. \u2018I disagree that Novo\u2019s drug portfolio is materially worse than Lilly\u2019s,\u2019 says Kumar. \u2018These are two fantastic companies that are ahead of the curve.\u2019 He encountered transformed sentiments around drugs for treating obesity in June at the American Diabetes Association conference in Chicago, US. \u2018Diet and exercise hasn\u2019t worked. Pharmacotherapy we now know works,\u2019 he says. \u2018The medical community is convinced. The patients are convinced. The payers have to find a way to pay for it.\u2019<\/p>\n","protected":false},"excerpt":{"rendered":"Novo Nordisk is cutting 9000 jobs with the intention of saving around DKK8 billion (\u00a31 billion) in annual…\n","protected":false},"author":2,"featured_media":174152,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[64,63,137,500],"class_list":{"0":"post-174151","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-healthcare","8":"tag-au","9":"tag-australia","10":"tag-health","11":"tag-healthcare"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/174151","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=174151"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/174151\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/174152"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=174151"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=174151"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=174151"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}