|Novo CEO Lars Rebien Sørensen
With Novo Nordisk's ($NVO) chief exec Lars Rebien Sørensen's contract expiring within the next few years, the company's board is scouting his replacement. And as soon as they name one, Sørensen says he's ready to make a quick exit.
The 60-year-old helmsman likely won't stay on through the end of his contract in 2019, and he'll pack up once the board names a successor, according to an interview with Danish newspaper Berlingske. And while some have tabbed deputy CEO Kåre Schultz as the "official crown prince," the paper says, it's up to the board to make a decision--and it hasn't done so yet.
Sørensen will leave big shoes to fill. During his CEO stint, Novo's stock has returned 9-fold including dividends--an increase of about 17% a year, compared with about 6% for its U.S. pharma counterparts, Bloomberg notes. It has also ridden a global diabetes wave to yearly insulin sales growth of about 14% over the past decade.
And while the past year hasn't been Novo's best, it looks as if Sørensen has the company on course for next year. In late October, the drugmaker said it expects growth in the high single digits in 2015, and brand new FDA approval Saxenda will help toward that end. The company thinks the weight-loss injection can help fill the U.S. sales gap for Tresiba, a therapy the FDA rejected last year that's gaining ground overseas.
So far, some industry-watchers have speculated that Novo may turn to deputy Schultz to keep Sørensen's hot streak going. In January 2014, the company fueled those rumors by promoting the then-Chief Operating Officer, a move Sørensen said would give Schultz "an opportunity to develop his leadership."
If the board does select Schultz, he'll have the chance to make good on his June prediction that Novo would double its annual revenues within the next decade. By 2020, 40 million diabetes patients will be using the company's products, up from 20 million now, he figures--an increase that'll lift revenues by at least 10% a year.
But that's not a sure thing. The company's board has stayed mum so far, and while it searches, it'll be Schultz's job to build a closer relationship with Novo's directors and Chairman Göran Ando, Sørensen told Berlingske.
No matter who gets the baton from Sørensen, Bloomberg Intelligence analyst Sam Fazeli predicts, the leadership transition should go more smoothly than it has for pharma peers Sanofi ($SNY) and Teva ($TEVA), both of which saw their execs exit amid squabbles with the board. It's "a normal time to change," he told Bloomberg, "and the company's strategy is not complicated."
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