Can Novo Nordisk's new CEO stop rivals from taking over the anti-obesity market?

The Danish drugmaker has consistently misread the U.S. market and the threat of compounders

- Peter Loftus

In April, Danish drugmaker Novo Nordisk formed what was supposed to be a long-term collaboration to promote its weight-loss drug Wegovy on the popular telehealth service Hims & Hers.

The deal was Novo Nordisk's bid to grab back market share from the cheaper, knockoff versions that Hims & Hers and other telehealth companies were selling.

But within weeks, Novo Nordisk's partnership crumbled amid a messy war of words. Novo Nordisk accused Hims & Hers of deceptively selling large volumes of copycat versions of Wegovy. Hims & Hers blasted Novo Nordisk, saying Novo Nordisk improperly pressured it to steer patients to brand-name Wegovy.

Hims & Hers is still selling compounded Wegovy, which the U.S. Food and Drug Administration had allowed while the drug was in shortage, even though that shortage is now over.

Novo Nordisk has consistently misread the U.S. market and the threat of compounders, which make alternative versions of anti-obesity drugs. This culminated in the implosion of the high-profile deal with Hims & Hers in June—and Novo Nordisk's warning Tuesday that its full-year sales and earnings would be lower than expected, which sent its stock price plunging. In early trading Wednesday, Novo Nordisk shares fell about 6%.

Now, some industry observers doubt whether incoming Chief Executive Maziar Mike Doustdar, the company's first non-Danish leader but nevertheless a longtime company insider, can fix that. He has experience leading international operations, but not in the U.S., where Novo Nordisk's biggest competitive threats lie, including rival Eli Lilly, which has a more effective drug in Zepbound.