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We are only scratching the surface in one more patient switch reading, and it takes quite some time to scale manufacture and trinket through many more millions of pieces.
This is the man in charge of Europe's most valuable company, Novo Nordisk and its blockbuster diabetes and obesity drugs of Zembec and Mogovi both contain the key ingredient sea BlueTide, revolutionizing the weight loss market and generating billions in sales. Celebrities have helped their popularity. Sore Sharon Osbourne, Chelsea Handler, and Elon Musk have all publicly talked about taking the zepig Orrigovie, and they've had further backing from Oprah Winfrey.
It's a global phenomenon, reaching millions on social media apps, including TikTok, but it's not without controversy, including possible side effects, high prices, and the company's lobbying efforts, receiving criticism around the world world, and in some cases patients might also need to take the drugs indefinitely to avoid regaining the weight. Chief executive Las Freugljogensen says obesity is a disease and things a company will learn from its growing number of patients.
When I asked the scientists, they say, pology and mechanism will tell you that it's quite treatment. My personal view is that you will also here learned that patients are much different and they'll be different avenues, so we'll have to build a portfolio of interventions.
On this episode of Leaders with Laqua, I traveled to the firm's headquarters in Copenhagen, Denmark. I asked Lars Feugair Jogensen about the global sensation, how he's navigating the company's meteoric rise, and the sweeping changes they could bring across a range of industries. Lurs, thank you so much for being on Bloomberg with us.
That sine thanks for having me.
I mean, after decades of research basically and over finds a molecule that changes everything in terms of weight loss drugs. Were you taken by surprise at the appetite actually for these drugs and how mainstream they are?
Yeah, I would actually say that many surprises when you get products like that. It starts with surprises in the innovation because there are many shots being made on goal and most fail and the winner is often the one that surprises people the most.
So why do you think this. I guess surprise or success was unexpected. Did it capture something in society that you weren't ready for.
I think we have seen first many decades of our company was focused on type one diabetes. Then because of lifestyle changes, perhaps genetics, there was an increase in type two dia beats. But for many years type two the beats was not intensively treated. Then there was a so called uk PDS started that really showed that you need to treat typetuta beats to prevent commobidities, and that increased
the diabetes marked a lot. Now we are kind of seeing the same with obesity that for years we felt that perhaps obesity is not a real disease, not something you should treat, but that's now being established that actually by understanding the underlying courses of obesity, that there's a lot of a lot of play, for instance genetics, but now also innovations that can actually treat the disease, help
people reduce weight and prevent the commodities. So I think it's a repeat in a way of what happened with type two diabetes, and that then suddenly opens a market that turns out to be way bigger than the diabetes market.
How difficult is it to have a lifelong treatment? And again, how do you see that changing?
I think we are yet to learn how patient journeys will be much different. Some will be on lifelong treatment, Some will have, say progressive obesity that will keep you put more and more weight on and they'll need more and more eificacious medicine. But perhaps also be some who we're actually being on treatment for some time almost prevents them, and they'll have a different trajectory. I don't think we
have seen much of this yet. When I asked the scientists I'm not a scientist myself, they say, but bylity and mechanism will tell you that it's chronic treatment. My personal view is that we will also here learn that patients are much different and there'll be different avenues, so
we'll have to build a portfolio of interventions. Lifestyle will also play into for some of them, and I think we can help many patients get down to a weight that they can maintain and live the life they want to live and avoid many comobilities for the healthcare systems.
I mean, we also heard from some of the food companies that the chief executives of some of the big groups are having crisis talks. And actually, does this mean that there's going to be a wider adoption of these drugs? Does it mean that people are going to eat an drink thirty percent less? Do you see it really changing our societies?
I think there'll be many changes, But I think with that also comes opportunities. They'll perhaps be a different preference for snacking, so I think we still need to eat, so maybe perhaps a bit less of the unhealthy snacking and a preference for more the healthy stuff. So I think for companies it's also about, you know, following the trend and evolving your business and moving to where the
market is. And I think there is probably, say an eighty twenty perspective here, like in many other sectors, that you will have a few patients who are really heavy consumers, and if those are also those who then start up treatment, I think they'll be a relative bigger impact on some of these companies. But I was say, in general, I think it's a bit hyped when we see their actions.
We see because we are only scratching the surface in the number of patients we are treating, and it takes quite some time to scale manufacturing to get to many more millions of patients.
Hollywood has also adopted actually you know your weight loss drugs? Is that a good or a bad thing.
We now have a situation where social media, you know, is filled with communication around our products, and that's a complete new for us. We have focused on educating physicians. In most countries we cannot do direct to consumer advertisement and in all countries is really important for us. We get physicians to understand which products are approved for type tuta biders, which are proved for obesity, what's a mechanism
and how should they be used? And when we see at you get data from insurance companies, et cetera, we can see the profile of those who use our medicines. We can see that they are on areas people with a very high BMI, well above thirty. So that is actually also the approved label. So we feel comfortable about that. It is people in need of medical intervention to treat serious obesity situations.
But you've become such a phenomenon and the you know their means and you're right, it's all over social media and some are saying, look, the problem with this is that it could actually lead to more eating disorders, and this is probably because of the increase in social media. What do former companies do Can they do anything to kind of balance this?
Yeah, I think we have quite spent some time on understanding what what does this mean, what's what's the breath of it? And we've come to realize that we cannot control social media. We try to be present and get our messaging in. But then all our medicines they take
a physician writing a script. So we really focus on the physician to make sure that they understand what are the mechanisms, who are the appropriate patients, what's that labor And then I think we have to also trust that the physicians they do what is right for their patient, and they should for sure not prescribe for people living.
With the even sold coming up. I asked ls for Galiogensen about criticism the company has faced over its prices, with some analysts predicting the weight loss drug industry could be worth one hundred and fifteen billion dollars a year. Globally. More than one billion people are thought to be abest It's a crucial market for weight loss drug makers like
Nova Nordisk, but challenges remain. The company's patents expire in the US and the EU at the end of the next decade, and rival drugs are already emerging like zet bound by Eli Lilly I also achieved executive Galijoginsen about regulatory pressures and future growth. So how do you think about pricing? Again, you must have gone some difficult questions from governments. But also this goes back to innovation.
Most products are priced according to the value they bring, and I feel really good about the value of our medicines what they bring to the individual patient, but are also the value to the healthcare system. And we have today healthcare systems around the world who were typically designed for acute care, but finding that eighty percent of the cost in the healthcare system is linked to chronic care.
And we have a portfolio of products that are really addressing some of the chronic diseases of our day and age, diabetes, obesity,
and the commobidities that follows that. We know that there are projections that say by twenty to thirty five, the World Obesiti Federation predicts that the cost burden to society will be four trillion dollars of the people living with obesity, and that course is going to a large degree be taken up by healthcare systems who are already struggling today eating populations, you know, shortage of labor, A lot of workers left the healthcare systems during the pandemic after the pandemic.
So being articulating, what is actually value of the medicine we have and if you invest in that, Yes, there is a cost upfront, maybe we can discuss how we you know, we deal with that, but there is actually tremendous value in terms of preventing cost and keeping people out of hospital.
But this is a crucial moment because your prices will probably go down as you have more competitors coming in. We know if ELI lately, you know, Amgin could be a competitor. And so this is I guess the crucial time where we have to make investment decisions when prices are high and you have more cash coming in. Is that right? Is that how you view it?
Yes, to put a bit of color around it. The same forecast predicts that there'll be say a billion people living with obesity in thirty to thirty five. We are perhaps serving one or two million of them today, So there's a huge market opportunity and there's place for more.
And then you're right that in most markets, when you get more competition, and also over time, pricing moves down because you start treating those who accept, say the higher price point in the US, that's commercial insurance, and then over time you get broader access and you get to patients paying a lower price. So if you just take our leading diabetes product in the US since launch in twenty eighteen, the price we get after rebates, discount, et cetera,
is some forty percent lower than when we launched. That's often not mentioned in the say the political debate. Instead, the list price is mentioned, which is not actually what we book in our account because that's after rebates.
V US is such a large market, would you ever deal list or even change headquarters to the US.
That's unlikely. We are controlled by a foundation that's anchored in Denmark. We have a lot of say, footprint in Denmark. Having said that, we do invest and expand a lot globally. Most of what we sell in the US we also produce in the US, So in many aspects we are as much a US company as we are a Danish company, but the headquarter, the corporate headquarter is based in Denmark. For the foreseble future.
You think of Denmark and really now you think of Novo because of the size of revenues, which is I think bigger than GDP. Is that uncomfortable.
I think maybe the perspective should be corrected a bit because there's this comparison about our market cap with the Danish GDP, and we all know that GDP is an economic flow matrix for the flow on a yearly basis, and the market cap is the total value of the company. I'm sure if we compare the market cap of No Noise with the market cap of everything that's in Denmark,
we would be tiny. But of course there's also the point that with our expansions, our you know, more than thirty thousand per years in Denmark, huge capex investment, we are fueling the GDP growth and you know we take that quite seriously. So the jobs we create I don't think will disappear again. And now we talk about expanding in the US, it doesn't come in the shape a form of moving activities from dinner to the US. It's
growth in the US. So we will be careful and respectful in how we grow, so we can do that in a sustainable way, and.
That's also increasing supply with new factories.
Yeah, we have made huge investment decisions and these are you know, billion dollar commitments per year, and it takes four or five years to build some of these facilities and welckily started already years back. So we have more and more lines kicking in on an ongoing basis, but some of them will also be kicking.
In in the future. Are you also looking for acquisitions.
Yes, we are. We are in the unique situation that most of the products we have came from our in house on the efforts, which is a bit unusual compared to some of our peers. We expect to carry on with that, but we can also see that we can complement that by some acquisitions. So typically it would be Early States bio check, where they have great science, we have disease understanding, We have the infrastructure, so we can express that science in a better way than they can
do on their own. So merging makes a perfect marriage, and some of the party is bigger than what each can do on their own.
Former companies having a harder time after COVID there seems to have been an explosion of not trusting pharmaceutical companies, even you know, vaccines being questioned. Have you felt any backlash?
Yes, And to me, that's a really, really sad situation to be in because had it not been for some of the you know, very innovative small biotechs who came up with vaccines and then teaming up with some of the largest forces of our industry to in record time get approval and scaling manufacturing, I think the world would have looked much different today. And I respect that some who do not like vaccines, but the majority of us had a number of shots and that led to a
lot of debate about our patents really needed. And unless we have you know, an ability to patent innovation, there's not going to be any innovation, so there will be no new products. So I think there's something about equality how we distribute products, and honestly, I think a lot of the rich countries ended up grabbing products for their own population at the expense of some of the developing
countries who do not get access. That then leads to a debate whether IP is the right way to go, But that for me, is the wrong discussion we have to figure out how can with social atarity in a way where we actually acknowledge that the whole world needs the benefit in a fair way. But if you take the incentive away from innovation, we're all weigh off.
Coming up Las four, gad Joginsen tells me about his leadership style at the helm of Europe's most valuable company. The market value of Novnordisk is bigger than the Danish economy, and its philanthropic foundation is now the world's largest, with more than double the assets of the Gates Foundation. I asked Lars for Regal Jogensen how he handles a company's success and his approach to corporate culture. Are you enjoying success or is it with it? Does it also bring a lot of responsibility?
I to go as CEO at a time where Asia price had just been cut by forty percent, we were in no growth or no single digit growth, and it's much harder to invest in the business do things you want to do compared to what the opportunities are today. So I enjoy that, but obviously it also comes with many challenges about how to sustain the success of a company. Let's enjoyed success or what kind.
Of leader are you or what kind of leader? Would your employees say you are?
Well, you should ask them. I hope they would say that I'm authentic, I'm relative easy to read. I would also hope they say that I'm curious because I'm another specialist in anything. But I found that there has not been yet a problem in the company we couldn't solve
if we actually mobilized the right people. So I'm born with a big nose and big ears, and I use the attributes of that eas and every day to collect, say, opinions from the company, and then it's my role to combine it into an opinion together with my team and make sure that we make the right choice.
So does a perfect leader in twenty twenty four need to be a visionary or a problem solver?
I would say, if I have to solve the problems, it's a problem because if examined, when COVID nineteen arrived, we decided to close down, say the offices we kept manufacturing, and the border is running and we all went home, and what you do well, you need to establish a crisis response team to deal with that. So the first decision I made was I should not be part of that why I was a bit out of a loop
for a couple of days. But I knew if I put myself into that, I would become the bottleneck in the company and the company would suddenly have lost its CEO. So I asked our CEFO to share that and then I could still, you know, be there for everybody, and people could come to me and check in, and I could try to get a view for what are oil companies doing, what's happening and and and give them some input.
So if the CEO turns into the problem solve with the company, I think the company needs another CEO.
Have you changed as a CEO?
I believe I have. I when I I was promoted, I took a step up in the team, So I went from over night being colleague to being the leader of the team. And I think they would tell me today that they would have liked me maybe to a bit quicker act like the boss, But for me it was not natural to just be say bussy after one night.
So I think I've been growing into the role and I feel more comfortable today in actually listening to my guts, which is a combination of your own feelings but also your experiences and earlier say what I believe in, and that creates clarity for an organization with more than sixty thousand people.
And so Saturday mornings, I understand you have off.
Yeah, Saturday is always a day where powered down. So I run at a relative high pace thout the week, try to wrap things up, and Saturday is a quiet day for me in terms of work. And I start typically by playing tennis with my wife. We'll go for a swim all year round. After that, have a nice lunch, and then I'm onto a good trajectory for the weekend. And then Sunday I try to prepare for the coming weeks.
But through a weekend I would send ather no emails of very few emails, because I want to drive a culture where all gets an opportunity to spend the weekend as they fancy. And I think what we do is so difficult and it takes so much creative thinking to succeed that if you're always on, always busy, the bandwidth of your reflection is just too narrow. And I generally believe that Monday mornings I'm a better leader than I am,
say Friday afternoon. I also take all my vacations. I generally believe I'm a much better CEO right after a vacation than I am before vacation.
What's your best piece of advice you've ever received, and what's the worst piece of advice you've ever received.
The best advice would probably be give people a fair chance to succeed, and most can actually do much better than the belief themselves. And perhaps also you believe based on say, short term performance. So trust people and give them what is needed for them to succeed. You'll see people succeeding. The worst piece would be something that was influenced by, say politics or spinning facts. I'm hyper allergic to politics and where you try to take advantage of
a position. So I've had one experience during my career where I gave my record resignition because somebody, a close colleague, actually completely twisted some facts. We had just agreed how to approach. Then we met with our shared boss and my colleague just turned it around. I said, okay, anteqrity so so holy for me that if people play tricks, you know, it's not my game whatever. So I just said, okay,
this is it. I'm out here. But we sorted we shorted out, I still stayed so so so any advice that is not based on honesty, decency, and you know, following the facts, I have a really hard time.
Thank you so much for your time today.
Thank you