Novo's new CEO faces sceptical investors with Wegovy US sales in focus
Doustdar, an Iranian-born Austrian national who grew up in the United States, is a company man. He joined Novo in 1992 as an office clerk in Vienna, rising through the ranks to head all commercial units globally - minus the U.S.
"The company needs to address recent market challenges with speed and ambition," Novo Nordisk Chair Helge Lund said in a statement on Tuesday. "Mike has a clear vision of how to unlock the full potential of the opportunities ahead."
Investors aren't so sure, worried that Doustdar's lack of U.S. experience will hinder his ability to turn things around in Novo's top market and take the battle to tough U.S. rival Eli Lilly (LLY.N), opens new tab.
Novo, which became Europe's most valuable listed firm after the launch of Wegovy in 2021, has seen its shares slump since mid last year, which led to the abrupt removal in May of CEO Lars Fruergaard Jorgensen. On Tuesday the shares plunged more than 20%, knocking some $70 billion off the group's market cap.
"When the stock falls as much as it has, people want to see change," said Barclays analyst Emily Field, adding that her sense was that "people are not happy" with the choice of CEO because it was not a big enough renewal.
"My understanding is that he has never had U.S. operational experience, and the U.S. is all that matters."
Novo - once worth as much as $615 billion, and now nearer $240 billion - has faced rising competition and been hit by copycat rivals to its weight-loss drugs, especially in the critical U.S. market, which led to a sharp profit warning earlier on Tuesday.
In early calls with analysts and journalists, Doustdar said that there was an "urgency" to do things differently.
"I don't like it," Doustdar said when asked about the share price plunge. "I don't like it as an employee, I don't like it as a CEO-elect, and I certainly don't like it as a shareholder myself. But setbacks don't define companies. Our response does."
Jefferies analysts said they were surprised by the appointment of Doustdar, noting that feedback had suggested a preference for an external candidate.
"I don't see this as super positive," said Lukas Leu, portfolio manager at Bellevue Asset Management, a Novo shareholder. Markus Manns, a portfolio manager at another shareholder, Union Investment, added there was "slight disappointment".
"People had hoped for an external candidate," he said.
Board chair Lund said external and internal candidates had been considered in the CEO search, and Doustdar had emerged as the leading candidate in part because he knows the company and its strengths and weaknesses.
"He can respond and take actions on those, I think, quicker than anyone could do coming from the outside," Lund said.
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