Activist hedge fund Parvus builds stake in Novo Nordisk as leadership search begins

Novo Nordisk

Activist hedge fund Parvus Asset Management is building a stake in Novo Nordisk, the maker of Ozempic, as the Danish drugmaker searches for a new chief executive amid a sharp decline in its share price. The move signals Parvus’s intent to influence Novo Nordisk’s leadership strategy at a crucial moment for the company, the Financial Times reported.

According to people familiar with the matter, London-based Parvus wants to weigh in on the choice of Novo’s next CEO after disappointing obesity drug trial results and weaker-than-expected sales eroded investor confidence. Novo shares have tumbled 50 percent over the past year, as US rival Eli Lilly gained ground in the lucrative weight-loss market.

Leadership uncertainty as market challenges mount

Last month, Novo Nordisk announced that chief executive Lars Fruergaard Jørgensen would step down earlier than planned, though he will remain in his post until a successor is appointed. While Novo Nordisk no longer holds the title of Europe’s largest listed company, it retains a formidable market capitalization of $334 billion.

The leadership transition comes at a critical time. Novo Nordisk recently cut its sales and profit forecasts, citing the proliferation of lower-cost replica obesity drugs in the US. These generic alternatives, initially permitted during supply shortages, have eaten into Novo’s market share and contributed to investor jitters.

Parvus targets influence despite foundation control

Parvus has not disclosed the size of its stake in Novo Nordisk. Under Danish securities regulations, investors are only required to report holdings above 5 percent, and Parvus is believed to be below that threshold. The activist fund manages total holdings of £5.2 billion, according to Bloomberg.

Despite the Novo Nordisk Foundation holding the majority of voting rights — a structure that typically insulates management from shareholder activism — Parvus appears determined to exert influence. The foundation’s chair, Lars Rebien Sørensen, a former Novo CEO, has joined the board as an observer during the CEO search process.

Parvus, Novo Nordisk and the foundation all declined to comment on the developments.

Activist playbook targets European corporate giants

Parvus, co-founded in 2004 by ex-Merrill Lynch fund manager Edoardo Mercadante, has a track record of activist interventions in major European firms. It previously opposed UK bookmaker William Hill’s proposed merger with Amaya and helped block UK security group G4S’s £5.2 billion takeover of Danish firm ISS.

The hedge fund has also built positions in companies including Ryanair, Flutter Entertainment, Italian bank UniCredit, French hotel group Accor, and fellow Danish drugmaker Ipsen. Activist investors have in the past been able to apply pressure even with minority stakes; US activists Starboard Value and Irenic Capital notably led a prolonged campaign against News Corp despite the Murdoch family’s dominant shareholdings.

Whether Parvus will succeed in swaying Novo Nordisk’s leadership choices remains uncertain given the foundation’s strong grip on corporate governance. But its move underscores the growing activist interest in Europe’s pharmaceutical sector, where leadership decisions could reshape competitive dynamics in the fast-evolving obesity drug market.