Sharped decline in Novo's share price by 30%, resulting in a market value loss of approximately $70 billion, following a profit warning issued for their weight loss drug, Wegovy.

Novo Nordisk, the Danish pharmaceutical company, has announced a significant change in leadership. Maziar Mike Doustdar, currently vice president for international operations, has been named as the new CEO, effective from August 7.

This appointment comes following the abrupt removal of Lars Fruergaard Jørgensen as CEO in May 2023. Doustdar, an Iranian-born, Austrian national who grew up in the United States, brings a unique perspective to the role.

The company's shares have been underperforming this year, with a plunge of nearly 30% before paring some losses to trade down over 20% by mid-afternoon. This downturn has led to a decrease in the company's market value by $70 billion on Tuesday.

One of Doustdar's most urgent challenges will be to revive Novo's performance in the United States, the largest market for weight-loss drugs. Analysts and investors had argued that Novo should select an American or a person with extensive experience working in the United States as its next CEO.

Novo Nordisk has been hit by copycats of its GLP-1 drugs Wegovy for weight-loss and Ozempic for diabetes. Despite Novo's expectation that many US patients using compounded GLP-1 drugs would switch to branded treatments after a Food and Drug Administration ban, many US patients are still using compounded GLP-1s.

This has led to a loss of the company's first-mover advantage in the United States this year to rival Eli Lilly. Novo launched its weight-loss drug Wegovy nearly two and a half years before Eli Lilly's Zepbound, but Zepbound prescriptions surpassed those of Wegovy this year by more than 100,000 a week.

The company has also cut its 2025 sales outlook due to lower growth expectations in the second half in the US, both for Wegovy and Ozempic in the GLP-1 diabetes market. As a result, Novo Nordisk has slashed its outlook for 2025 sales growth to between 8% and 14%.

Markus Manns, a portfolio manager at mutual fund firm Union Investment, stated that the guidance cut was a shocker. Angelo Meda, portfolio manager and head of equities at Banor SIM in Milan, expressed concern about the illegal channel siphoning away market share from Novo Nordisk.

Doustdar, who previously led the company's businesses in the Middle East and Southeast Asia, stated that his mandate is to increase the sense of urgency and execute differently. He joined Novo Nordisk in 1992 and has been with the company for over three decades.

Novo Nordisk is facing a reckoning after the abrupt removal of CEO Lars Fruergaard Jorgensen. The company is hoping that Doustdar's leadership will help to turn around its fortunes in the competitive pharmaceutical market.