Novo Nordisk's veteran CEO Lars Rebien Sorensen to step down

By Annabella PultzNielsen

COPENHAGEN (Reuters) - Novo Nordisk's long-serving chief executive Lars Rebien Sorensen is to step down early, it was announced on Thursday, at a time when the world's largest insulin maker has said it faces increased competition in the U.S. market where it generates about half its revenues.

The company said Rebien Sorensen will be succeeded from January by Lars Fruergaard Jorgensen, currently executive vice president and head of corporate development.

In addition the company's marketing chief, Jacob Riis, has been appointed as head of the North American business.

Riis, who joined the company in 1996 and has previously been regarded by analysts as heir apparent to Rebien Sorensen, is currently executive vice president in charge of marketing and head of the China and Pacific sales regions.

"We have unprecedented challenges in front of us in terms of competition and pricing environment, but we also have the best ever portfolio to compete with," said Jorgensen, who has been with the company for 25 years.

Rebien Sorensen's departure appears to be a change of plan, the company having said in April 2015 that he would remain in his role until he approached the end of his contract, expiring in 2019.

Since he became CEO in 2000, the share price had risen more than 840 percent but has fallen 22 percent from its peak in December 2015 following a sharp drop to 311 crowns last month after a profit warning due to pricing pressures in the United States.

The shares were down 1.2 percent at 309 crowns by 1330 GMT on Thursday.

Novo Nordisk's product prices in the United States have been squeezed by pharmacy benefit managers who administer drug benefits for employers and health plans.

"This move is an acknowledgement of the serious challenges they face, primarily on the U.S. market," Jyske Bank analyst Frank Horning Andersen said.

"After first-half results there has been lots scepticism especially among foreign investors about Novo Nordisk's ability to deliver," Andersen said.

Chairman Göran Ando said the change in top management had been a long process and not a result of current challenges on the U.S. market or last month's sharp drop in the share price.

"But it will in a way take out an uncertainty, because everyone knew that we are doing succession planning," said Ando said at a news conference.

Since Sorensen took over as CEO the company's revenue has increased five-fold, to 108 billion Danish crowns (12 billion pounds) last year, while net profit has risen 11-fold to nearly 35 billion crowns.

"This is an emotional moment for me after having worked 34 years in this company," said Sorensen, who will be 62 in October and last year was named by Harvard Business Review as the top-performing CEO in the world.

Sorensen will be appointed to the boards of Novo Nordisk Foundation and the foundation's holding company, Novo A/S, which together holds a majority of voting rights in Novo Nordisk.

(Additional reporting by Jacob Gronholt-Pedersen,; editing by Adrian Croft, Greg Mahlich)