By Ana Nicolaci da Costa, NCS
London (NCS) — Novo Nordisk, the maker of weight reduction drug Wegovy, will lay off about 9,000 individuals because it grapples with rising competition within the weight problems market.
The Danish firm has been battling it out with US rival Eli Lilly, with every growing newer medicines to turbocharge weight reduction and diabetes outcomes because the approval of Nordisk’s Ozempic in 2017.
The job cuts introduced by Novo Nordisk Wednesday quantity to greater than 11% of its world workforce.
“Our markets are evolving, particularly in obesity, as it has become more competitive and consumer-driven,” Mike Doustdar, president and CEO, mentioned in a statement.
The firm expects the layoffs to ship annualized financial savings of round $1.25 billion by the top of 2026, which will likely be redirected to “growth opportunities” in diabetes and weight problems, together with analysis and growth, it mentioned within the assertion.
In an indication of rising competition within the United States – by far the most important marketplace for Novo Nordisk – Eli Lilly mentioned final month that it will hike the price of its rival weight reduction drug Mounjaro within the United Kingdom because it tries to carry down costs within the US, after weeks of strain from the Trump administration.
“Lilly supports… the objective of more fairly sharing the costs of breakthrough medical research across developed countries,” the corporate mentioned in a statement, including that the costs paid by governments and well being programs will want to improve in different developed markets, akin to Europe, so as to make them decrease within the US.
Novo Nordisk inventory (NVO) was up 2.5% on the day in afternoon buying and selling in Copenhagen, paring earlier features.
“Following a period of hyper-growth in employee numbers, Novo is resizing headcount with the aim to reduce complexity in the organization,” analysts at Swiss financial institution UBS mentioned in a notice. “The key question is when could the topline see the benefit of the reinvestment… We expect that investors will remain somewhat skeptical until the growth plan is outlined.”
The-NCS-Wire
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