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Novo Nordisk (NVO) stock fell after announcing that CEO Lars Fruergaard Jørgensen will step down.
BMO Capital Markets managing director of biopharma equity research Evan Seigerman joins Market Domination with Josh Lipton and Bullseye American Ingenuity Fund portfolio manager Adam Johnson to discuss the surprise C-suite change.
To watch more expert insights and analysis on the latest market action, check out more Market Domination here.
Novo Nordisk announcing a C-suite shakeup as market challenges weigh on that company. CEO Lars Fruergaard Jørgensen is stepping down after eight years in the role. Jørgensen will stay on through the CEO transition as the drug maker searches now for a new leader. For more on what's next for Novo, let's welcome in here Evan Seigerman, BMO Capital Markets managing director. Evan, it's always great to see you, sir. Uh let's talk about this news. So we've got a a change in this C-suite Evan, but let's be honest, the stock is a mess. It's down more than 50% in the past 12 months. Does this decision, does this change affect this company's future and fortunes? Is this is this the right answer to the problems at that company, Evan?
A lot of questions there. So let's let's talk about what has happened with the stock and kind of in the arms race between them and Lilly. I really think that like every opportunity they faltered, whether it's supplying the market with Wegovy, whether it's, you know, giving us unrealistic unrealistic expectations for Cagrisema, ignoring the threat of an oral small molecule. I feel like at every opportunity, they just kind of dropped the ball. So what does this mean going forward? Well, getting rid of a CEO might feel good, and I'm sure it feels good for the board that said we're going to get rid of him, but rarely does that actually change the strategy and right this ship. So that's what I'm most concerned about. Now there's no real, there's no one in charge, right? You have a board that's kind of angry. I we listen to the call, very defensive. And you don't have that consistent leadership to maybe help get the company out of this situation. Can always do a leadership transition, but I don't know if this was the way to do it.
So it's interesting Evan, you look at, I mean I know your market perform here, so you're equivalent of a hold, you're on the sidelines. Even now, Evan, even after the stock is down, you know, lost half its value in the past 12 months. I I guess you're you're suggesting your valuation is still not attractive.
Well, exactly. So we did that, we downgraded the stock a month ago ahead of Oral Slipron, ahead of earnings highlighting that we thought they were going to cut guidance, they did. And it's really when we look at the weekly script numbers. Ze bound is accelerating with Govy's flat lining. They might get a bump from the CVS Caremark formulary change come July, but that's not going to be enough to really change this narrative. So I am on the sidelines. I'm all in on belief. I've said that many times on this program and that's where I'm drawing my line in the sand.
Broader question Evan, this GLP1 market. I mean, you know, folks who who take these medicines, it's refrigeration, it's a shot, right? I mean, there's some challenges there. When is the pill coming, Evan? When do we have any firmer line of sight here?
Yes. So we had we had the first set of phase three data last month. We're going to get more data in 3Q. Lilly plans to file by year end, so we could have it on the markets, let's say the second half of 2026. So that's, you know, pretty near term given the arc of drug discovery and development.
Evan, always great to see you. Have a great weekend, sir.
Thank you so much. Have a good one.