10 months ago
Novo Chairman Blames Board Dropout on Pfizer Rivalry
Imagine two big companies that make important medicines, Novo Nordisk and Pfizer.
They are like rivals in a big race.
Recently, Novo Nordisk had a meeting to decide on new leaders.
One person they wanted for their team, Mikael Dolsten, suddenly said he couldn't join.
The head of Novo, Lars Rebien Sorensen, explained that this was because of a problem with his old job, and his old boss was Pfizer.
This happened right after Pfizer beat Novo in a race to buy a small company that was working on new weight-loss medicines.
Some people who own small pieces of Novo are worried about the big changes happening and think the leaders are taking too much risk.
But the leaders say they need to be strong and play tough to win in the medicine market.
Novo Nordisk Chairman Lars Rebien Sorensen was re-elected after explaining a proposed board member's withdrawal was due to a conflict with a former employer, implied to be competitor Pfizer.
Mikael Dolsten, former chief scientific officer at Pfizer, withdrew his candidacy for Novo's board shortly before the shareholder meeting.
The events unfold amid intense rivalry between Novo Nordisk and Pfizer, highlighted by Pfizer's recent $10 billion acquisition of obesity biotech Metsera Inc., which Novo also pursued.
The meeting followed a significant shake-up where over half of Novo's supervisory board resigned the previous month.
Minority investors and proxy advisers have expressed concerns about the transparency and accountability of Novo's restructuring efforts and its risk-taking strategy.
- Who
- Novo Nordisk A/S Chairman Lars Rebien Sorensen and its board; Mikael Dolsten; Pfizer Inc.; minority investors.
- What
- Lars Rebien Sorensen was re-elected chairman of Novo Nordisk. He explained the withdrawal of a proposed board member, Mikael Dolsten, was due to an issue with a former employer, implicitly Pfizer, Novo's competitor. This occurred amidst broader board restructuring and strategic disagreements.
- Where
- The events pertain to Novo Nordisk A/S, a Danish drugmaker, and its rivalry with US-based Pfizer Inc.
- When
- The shareholder meeting took place on Friday. The failed bidding war for Metsera Inc. closed the previous Thursday. Board resignations occurred last month.
- Why
- Novo Nordisk is undergoing significant restructuring and strategic adjustments, partly driven by intense competition with Pfizer, particularly in the obesity drug market. The withdrawal of Dolsten and investor concerns highlight the complexities of these changes and competitive landscape.
Support for Novo's Restructuring
Concerns from Minority Investors
Board Changes and Leadership
Support for Novo's Restructuring
Novo Chairman Lars Rebien Sorensen was re-elected and views the aggressive leadership of new CEO Mike Doustdar and himself as necessary for the company's recovery.
Concerns from Minority Investors
Some prominent minority investors, including Norway's sovereign wealth fund and CalSTRS, planned to reject the revamp, with proxy adviser ISS recommending abstention due to limited transparency and accountability.
Strategic Risk-Taking
Support for Novo's Restructuring
Sorensen sees the company's actions, including the failed bid for Metsera, as necessary 'rough' play in a competitive market, and considers the new CEO a 'warrior'.
Concerns from Minority Investors
Investors like Markus Manns believe Novo needs to evaluate future deals more carefully, take less risk, and develop a sustainable strategy for regaining market share and diversifying its portfolio, avoiding 'bold actions or risky deals'.
Key facts
- Company
- Novo Nordisk A/S
- New Chairman
- Lars Rebien Sorensen
- Proposed Board Member Withdrawal
- Mikael Dolsten (former Pfizer CSO)
- Recent Competitive Event
- $10 billion bidding war for Metsera Inc. (won by Pfizer)
- Recent Board Changes
- Over half the supervisory board resigned last month.
- Voting Control
- Novo Nordisk Foundation holds 77% of voting rights.
- Sorensen's Re-election Vote
- Over 93% of proxy and postal votes
- Layoffs Announced
- 11% of company workforce
Quotes
Lars Rebien Sorensen
Chairman of Novo Nordisk A/S
“We have gotten a warrior as a CEO for the company. I think that is what he called himself in interviews and certainly we have not been lacking in activity in the company.”
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“We had very much looked forward to working together with Mikael Dolsten. We hope that he might return at a later point in time. He’s welcome any time in the Novo family.”
livemint.com
Markus Manns
Portfolio manager at Union Investment
“What I don’t want are bold actions or risky deals”
livemint.com
Sebastien Malafosse
Portfolio manager at Edmond de Rothschild Asset Management
“I think it’s a good thing. very successful CEO of Novo before.”
livemint.com
Hanne Sindbaek
Danish author who has written three books about Novo Nordisk
“The velvet gloves are off. Now they realize it’s a rough market, and we have to play rough.”
livemint.com
