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Novo appoints Maziar Mike Doustdar as CEO

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Shares plunge more than 20% on Tuesday as stock slump

continues

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Investors question incoming chief's lack of U.S.

experience

By Maggie Fick and Jacob Gronholt-Pedersen

LONDON, July 29 (Reuters) - Novo Nordisk's

new CEO Maziar Mike Doustdar has been handed the reins to turn

around the Wegovy-making firm's flagging sales growth and

sliding share price. He first will need to win over sceptical

investors.

Doustdar, an Iranian-born Austrian national who grew up in

the United States, is a company man. He joined Novo in 1992 as

an office clerk in Vienna, rising through the ranks to head all

commercial units globally - minus the U.S.

"The company needs to address recent market challenges with

speed and ambition," Novo Nordisk Chair Helge Lund said in a

statement on Tuesday. "Mike has a clear vision of how to unlock

the full potential of the opportunities ahead."

Investors aren't so sure, worried that Doustdar's lack of

U.S. experience will hinder his ability to turn things around in

Novo's top market and take the battle to tough U.S. rival Eli

Lilly ( LLY ).

Novo, which became Europe's most valuable listed firm after

the launch of Wegovy in 2021, has seen its shares slump since

mid last year, which led to the abrupt removal in May of CEO

Lars Fruergaard Jorgensen. On Tuesday the shares plunged more

than 20%, knocking some $70 billion off the group's market cap.

"When the stock falls as much as it has, people want to see

change," said Barclays analyst Emily Field, adding that her

sense was that "people are not happy" with the choice of CEO

because it was not a big enough renewal.

"My understanding is that he has never had U.S. operational

experience, and the U.S. is all that matters."

Novo - once worth as much as $615 billion, and now nearer

$240 billion - has faced rising competition and been hit by

copycat rivals to its weight-loss drugs, especially in the

critical U.S. market, which led to a sharp profit warning

earlier on Tuesday.

In early calls with analysts and journalists, Doustdar said

that there was an "urgency" to do things differently.

"I don't like it," Doustdar said when asked about the share

price plunge. "I don't like it as an employee, I don't like it

as a CEO-elect, and I certainly don't like it as a shareholder

myself. But setbacks don't define companies. Our response does."

Jefferies analysts said they were surprised by the

appointment of Doustdar, noting that feedback had suggested a

preference for an external candidate.

"I don't see this as super positive," said Lukas Leu,

portfolio manager at Bellevue Asset Management, a Novo

shareholder. Markus Manns, a portfolio manager at another

shareholder, Union Investment, added there was "slight

disappointment".

"People had hoped for an external candidate," he said.

Board chair Lund said external and internal candidates had

been considered in the CEO search, and Doustdar had emerged as

the leading candidate in part because he knows the company and

its strengths and weaknesses.

"He can respond and take actions on those, I think, quicker

than anyone could do coming from the outside," Lund said.