Novo reduces workforce by 13,000 while pursuing new growth bets

Novo, the maker of blockbuster weight-loss and diabetes drugs Wegovy and Ozempic, has reduced its workforce by 13,000 over the past year as the company seeks to rein in costs while pursuing new growth opportunities in an increasingly competitive pharmaceutical market.

The workforce reduction was disclosed during an investor day in London, where Chief Executive Officer Mike Doustdar outlined a strategy aimed at restoring growth momentum through new medicines, broader therapeutic expansion and targeted acquisitions, according to reporting by the Financial Times and The Irish Times.

The announcement comes as Novo faces mounting pressure from rival Eli Lilly, whose obesity treatment Mounjaro has been outperforming Wegovy in the rapidly expanding global weight-loss drug market.

Cost discipline takes centre stage

Novo's latest workforce reduction builds on a broader restructuring programme initiated as competitive pressures intensified across the obesity-drug sector.

According to the company, 13,000 employees have left the business over the past year. The figure includes 9,000 job cuts announced last year, including 5,000 positions in Denmark, where the company is headquartered.

Novo also disclosed that a further 4,000 employees exited during the past year. A company spokesperson told the Financial Times that most of those departures resulted from natural attrition and decisions not to refill vacant roles.

The workforce changes reflect a broader effort to improve efficiency as Novo adjusts to shifting market dynamics and increasing competition.

Competition reshapes the obesity-drug landscape

Novo's leadership is attempting to regain momentum after losing ground to Eli Lilly in the multibillion-dollar obesity-drug market.

Investors reacted cautiously to the company's latest plans, with Novo shares falling by as much as 7% on Monday following the investor presentation, according to the Financial Times.

The company faces additional challenges as patents protecting semaglutide, the active ingredient in Ozempic and Wegovy, begin to expire in key markets.

Key market pressures facing Novo include:

• Intensifying competition from Eli Lilly's Mounjaro
• Patent expirations for semaglutide in India, Brazil, Turkey and China
• Future exclusivity losses expected in Europe and the United States from the early 2030s
• Recent clinical trial setbacks, including a late-stage cardiovascular drug study failure
• Growing competition from generic manufacturers

A combination of competitive pressures, patent expirations and pipeline execution risks is forcing major obesity-drug makers to rethink long-term growth strategies.

New therapies form the next growth chapter

Doustdar used the investor event to outline an ambitious plan to diversify Novo's business over the next decade.

The executive said the company aims to become a "larger and more diversified company by 2035", while continuing to strengthen its position in obesity, diabetes and blood disorder treatments.

Novo also plans to expand into new therapeutic areas, including:

• Liver disease
• Cardiovascular health
• Additional speciality medicine segments

The company has pledged to launch more than five "multi-blockbuster" medicines by 2030 as part of its growth strategy.

According to company projections presented to investors, Novo expects its future drug pipeline to generate combined sales of 150 billion Danish krone (€20 billion) by 2035. The company reported total sales of 309 billion Danish krone last year.

Pipeline investment remains a priority

Alongside internal research and development efforts, Novo signalled a greater willingness to pursue acquisitions to strengthen its pipeline.

Doustdar told investors the company would focus on acquiring high-quality assets where strategic gaps exist rather than pursuing deals based solely on size.

The company is also continuing to invest in manufacturing capacity. According to The Irish Times, Novo previously announced plans to invest €432 million in upgrading its Athlone facility in Ireland to produce the tablet version of Wegovy. The site currently employs around 260 people.

Research activity is also expected to accelerate. Martin Holst Lange, Novo's Chief Scientific Officer, said the company plans to advance up to 15 programmes annually into human clinical trials beginning next year, according to the Financial Times.

Betting on the next generation of obesity treatments

Despite recent challenges, Novo continues to invest heavily in its next generation of obesity medicines.

The company unveiled new trial data for CagriSema, an experimental obesity treatment expected to launch next year. According to results presented at the investor event, a 1mg dose delivered average weight loss of 12.4% among diabetes patients, compared with 9.1% for a 5mg dose of tirzepatide, the active ingredient used in Eli Lilly's weight-loss medicines.

Novo remains ahead of Lilly in the market for weight-loss pills, providing another potential growth avenue as competition in injectable treatments intensifies.