By Peter Loftus and Dominic Chopping

Ozempic maker Novo Nordisk pushed out its chief executive after losing ground in the anti-obesity drug market, which has caused a steep stock-price decline and impatience at the nonprofit foundation that controls the company.

Lars Fruergaard Jorgensen, who has headed the Danish pharmaceutical company for eight years, will step down after a period to support a smooth transition to new leadership.

A search for his successor is in progress, the company said.

With echoes of other recent corporate leadership changes, a former Novo CEO is coming back to the company as Jorgensen departs. Lars Rebien Sorensen, who was CEO of Novo from 2000 to 2016, will join Novo's board of directors as an observer, with the intent of being nominated as a board member next year.

Sorensen is chairman of the Novo Nordisk Foundation, the nonprofit that owns voting control of the drugmaker.

The Novo Nordisk Foundation told the drugmaker's leaders that it was interested in discussing "the merits of an accelerated CEO succession" and wanted to increase its representation on the board of the drugmaker, Novo Nordisk said Friday.

"I am pleased to be able to contribute my experience to the board of Novo Nordisk A/S. It's a great company that I obviously know very well," Sorensen said. "There have been some market challenges recently, which the board and executive leadership have taken actions to address. I look forward to contributing to this and to working with the entire Novo Nordisk board."

In light of the foundation's request, as well as the company's recent market challenges and share-price decline, Novo said it jointly concluded with Jorgensen that finding a new CEO was in the best interest of the company.

"We have concluded that it is in the best interest of the company that he steps down," Novo Nordisk Chair Helge Lund said on a conference call with analysts Friday.

Lund said that until now the board had been working on a different CEO succession timeline that didn't envision an imminent change.

"Serving as Novo Nordisk's CEO for the past eight years has been a privilege and an experience that I will always cherish," Jorgensen said. "I am proud of the results I have helped create together with my leadership team, the Board, and the thousands of employees who work every day to drive change to defeat serious chronic diseases."

Novo's main challenge is that it has lost a significant share of the anti-obesity drug market to rival Eli Lilly, whose drug Zepbound has demonstrated superior weight loss to Novo's Wegovy in studies. And Novo is widely seen as falling behind Lilly in research-and-development efforts to come up with new and improved weight-loss drugs.

Novo's shares have fallen more than 50% since mid-2024, its American depositary shares closing Thursday at $66.15. Novo's American depositary shares fell more than 2% in premarket trading Friday.

Write to Peter Loftus at Peter.Loftus@wsj.com and Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

May 16, 2025 09:15 ET (13:15 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.