Ozempic maker to cut 9,000 jobs

Novo Nordisk, the drugmaker behind Ozempic and Wegovy, was once Europe’s most valuable company - Hollie Adams/Reuters

The drugmaker behind Ozempic is to cut thousands of jobs as it grapples with a plummeting share price and competition to its breakthrough weight-loss injections.

Denmark’s Novo Nordisk said it would cut 9,000 jobs, with around 5,000 lay-offs expected in its home market, as it seeks to save 8bn Danish Kroner (£930m) in costs. The reductions represent more than 11pc of its total workforce.

Mike Doustdar, Novo Nordisk’s chief executive, blamed the redundancies on a “more competitive and consumer-driven” market for weight-loss and anti-obesity drugs as prices fall.

“By realigning our resources now, we will be able to prioritise investments to drive sustainable growth,” he said.

Novo Nordisk, which was once Europe’s most valuable company and was temporarily worth more than Denmark’s entire economy, has been in freefall amid aggressive competition from US rival Eli Lilly.

It is also battling demands from Donald Trump that pharmaceutical companies cut the cost of medication for Americans.

Mr Trump has ordered drugmakers to reduce the price of their products in the US and “negotiate harder with foreign freeloading nations”, taking aim at the lower cost of medicines in Europe.

Copycat wars

The Danish company’s diabetes drug Ozempic, launched in 2017, has enjoyed huge success for its off-label use as a weight-loss treatment. A similar drug, Wegovy, which relies on the compound semaglutide to mimic a feeling of fullness and encourage weight-loss, helped propel the company to a $500bn (£370bn) valuation.

However, its shares are down almost 50pc this year, with the company losing as much as $70bn from its value during a single day in June – as Eli Lilly’s rival drug Mounjaro proves equally popular, and appears to be more effective at treating obesity.

Eli Lilly’s drug proved in trials to help people lose on average 21pc of their body weight over an 18-month trial, more than Novo Nordisk’s rival chemicals. The trial was paid for by Eli Lilly.

Copycat versions of its drugs, meanwhile, have proved popular in America, prompting Novo Nordisk to halve the price of Ozempic in the US. The company has demanded US regulators ban the import of key ingredients for its drugs, warning knock-off versions could pose safety risks.

The company has also suffered leadership turmoil, with Mr Doustdar taking over as chief executive in July after his predecessor was sacked in May.

Novo Nordisk’s struggles have weighed on Denmark’s economy, prompting officials to cut its economic growth forecast for 2025 from 3pc to 1.4pc.

The business’s decline has wiped out significant chunks of Danish savers’ pensions, with billions of dollars invested by funds in the pharma company.

On Wednesday, Novo Nordisk said the job cuts would cause its profit margins to fall this year. The business said it expected to save 8bn Kroner by the end of next year with a similar one-off cost this year from the restructuring.

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