Lars Rebien Sorensen has returned as chairman of Novo Nordisk A/S following a contentious shareholder meeting that underscored the intense rivalry between the Danish drugmaker and its American competitor, Pfizer Inc. Sorensen, who previously spearheaded Novo's first weight-loss shot, addressed the withdrawal of proposed board member Mikael Dolsten, 67, who resigned just a day prior due to an 'issue with a former employer'. Although the company was not explicitly named, Dolsten is the former chief scientific officer at Pfizer, a company that recently outmaneuvered Novo in a $10 billion bidding war for obesity biotech Metsera Inc. Sorensen expressed regret over Dolsten's withdrawal, stating hope for his return to the 'Novo family' at a later time.

Pfizer's acquisition of Metsera, which closed recently, solidified the two companies' positions as direct competitors in the rapidly expanding and highly competitive pharmaceutical market, particularly in the obesity segment. The shareholder meeting concluded a turbulent period for Novo, marked by the resignation of over half of its supervisory board last month amid disputes over the pace of change within the company, known for blockbuster drugs like Ozempic and Wegovy. Sorensen's reappointment to lead the supervisory board was a foregone conclusion, given his additional role as head of the Novo Nordisk Foundation, which holds a controlling 77% of the company's voting rights. He secured more than 93% of proxy and postal votes, despite some prominent minority investors, including Norway's sovereign wealth fund and CalSTRS, signaling their intent to reject the board revamp. Influential proxy adviser Institutional Shareholder Services Inc. also recommended abstention, citing 'limited transparency and accountability to minority shareholders'.

Sorensen, who led Novo for 16 years, intends to seek a new chairman for the foundation and eventually make himself redundant on the Novo board. The current situation leaves the board in need of two additional candidates to be nominated at the next shareholder meeting in March. Minority investors now await to see if Sorensen's aggressive strategy, supported by the new, ambitious CEO Mike Doustdar, proves effective. The Sorensen-Doustdar leadership has already demonstrated a high-risk appetite, evidenced by their high-profile, albeit unsuccessful, attempt to disrupt Pfizer's deal for Metsera. This aggressive approach even involved Doustdar challenging Pfizer CEO Albert Bourla in discussions that reportedly reached the Oval Office. Sorensen described Doustdar as a 'warrior' for the company, noting the significant increase in activity under his leadership.

However, this brinkmanship has raised concerns among some investors. Markus Manns, a portfolio manager at Union Investment in Frankfurt, suggested that Novo needs to evaluate future deals more carefully and take 'much less risk' than it did with Metsera. Manns emphasized the need for a 'sound and sustainable' strategy to regain market share from archrival Eli Lilly & Co. and diversify its portfolio, explicitly stating, 'What I don’t want are bold actions or risky deals.' Novo faces a significant challenge in the obesity market, having lost its lead to Lilly and experiencing setbacks with its next-generation experimental drug, CagriSema. While competitors advance with novel compounds, Novo's immediate future offerings largely consist of reworked versions of existing drugs, such as a pill or higher-dose shot of Wegovy.

Sorensen's return, nearly a decade after he stepped down as CEO, offers him a second opportunity to reshape the drugmaker. During his initial 16-year tenure, he oversaw a 400% sales increase and the introduction of Saxenda, a precursor to Wegovy. Yet, his previous term concluded with Novo grappling with an insulin price squeeze that impacted both profits and share price. His successor, Lars Fruergaard Jorgensen, successfully introduced Ozempic and Wegovy, propelling Novo into the top ranks of global drugmakers. However, the company failed to capitalize fully on its first-mover advantage and is now struggling to regain its lead following a brutal board restructuring that starkly contrasted with Novo's traditionally consensual culture. Sebastien Malafosse, a portfolio manager at Edmond de Rothschild Asset Management, viewed Sorensen's return positively, recalling his highly successful previous tenure. Since Doustdar and Sorensen took the reins, Novo has initiated layoffs affecting 11% of the company, terminated long-standing projects like a stem cell-based diabetes cure effort, and engaged in the aggressive bidding war with Pfizer. As Danish author Hanne Sindbaek noted in reference to the Pfizer bidding war, 'The velvet gloves are off. Now they realize it’s a rough market, and we have to play rough.'