Dive Brief:

• Novo Nordisk’s largest investor said Tuesday it wants to replace more than half of the drugmaker’s board, calling an extraordinary general meeting of shareholders in November to install a handpicked slate of candidates.
• The election of new candidates is necessary because the current board was “too slow in recognizing” changes in the obesity drug market, said Lars Rebien Sørensen, chair of the Novo Nordisk Foundation. That pace, Sørensen added, led to lagging growth for the weight loss shot Wegovy, which resulted in large-scale layoffs announced in September.
• Board Chair Helge Lund, Vice Chair Henrik Poulsen and five independent members will not stand for election at the meeting. Four employee-elected board members will remain, along with Kasim Kutay, CEO of Novo Holdings. The foundation is proposing Sørensen as corporate board chair, for a term of no more than three years.

Dive Insight:

The Novo Foundation, through its subsidiary Novo Holdings, owns 25% of the shares and 70% of the votes in Novo Nordisk, making the election of its designees a likely formality when investors gather for the Nov. 14 meeting.

The board changes come amid a period of turmoil for Novo, which has recently seen underperforming sales, a layoff of 9,000 workers, and a CEO turnover with Maziar Mike Doustdar taking the helm in August. That followed a period where the company’s dominant position in the rapidly growing obesity treatment market was undercut by competition from Eli Lilly’s Zepbound and drug compounders — who seized on manufacturing capacity constraints to successfully sell cheap knockoff versions of both drugs.

“This is a huge failure, and I think many in the company will have to look at themselves, both in the company, in the management and in the board and [ask what] we have done differently to avoid this?” said Sørensen, who was Novo Nordisk’s CEO from 2000 to 2016, in a press conference to discuss the general meeting. “Because it is hugely disrupting to have to let go of that many people.”

In a statement, Lund said the current board had proposed a “renewal” focused on the “addition of select, new competencies while also maintaining continuity, whereas the board of the foundation wanted a more extensive reconfiguration.”

Lund added that the board, after a “thorough deliberation,” ultimately determined “it is in the best interest of the company and its shareholders to convene an extraordinary general meeting to elect new board members to provide clarity on the future governance of Novo Nordisk.”

Besides Lund and Poulsen, independent members Laurence Debroux, Andreas Fibig, Sylvie Grégoire, Christina Law and Martin Mackay won’t stand for election. In their place, the foundation has proposed Cees de Jong, board chair of Novonesis, as the Novo Nordisk vice chair, and Britt Meelby Jensen, Mikael Dolsten and Stephan Engels as members.

At the next regular general meeting in 2026, the foundation will also nominate Helena Saxon and one other person as board members.