COPENHAGEN (Reuters) -Investors knocked $70 billion off Novo Nordisk's market value on Tuesday after the maker of weight-loss drug Wegovy issued a profit warning and named a new CEO, as it battles rising competition in the obesity drug market.

Novo named Maziar Mike Doustdar as its new chief executive, turning to an experienced insider to revive sales and a share price hit by worries the company is falling behind in the weight-loss drug race it started.

News of a change at the top deepened a stock market rout, triggered after Novo slashed its outlook for 2025 sales growth to between 8% and 14%, from between 13% and 21% previously. Its shares plunged nearly 30% before paring some losses to trade down about 20% by mid-afternoon.

"The magnitude of the guidance cut is a shocker," Markus Manns, a portfolio manager at mutual fund firm Union Investment, a Novo shareholder, told Reuters, adding that Novo's issues went deeper than "compounded" copycats to Wegovy.

Novo has been hit by copycat versions of its weight-loss drugs - mixed or compounded by pharmacies. A crackdown on legal compounded versions of Wegovy in May could improve the situation, although Novo said illegal compounding continued.

The Danish company said in a statement that the cut to its 2025 sales outlook was due to lower growth expectations in the second half in the U.S., both for Wegovy and Ozempic in the GLP-1 diabetes market.

The drugmaker, which became Europe's most valuable listed company following the launch of Wegovy in 2021, is now facing a reckoning as it looks to turn things around after the abrupt removal in May of CEO Lars Fruergaard Jorgensen.

At its peak in June 2024, Novo was worth as much as $615 billion, but its shares have plunged on investor concerns about the company's experimental drug pipeline and its ability to navigate challenges in the U.S. market.

"The stock has gone from being a market darling to one of its biggest letdowns," said Angelo Meda, portfolio manager and head of equities at Banor SIM in Milan, which has a small Novo stake. "The biggest concern is the illegal channel siphoning away market share - something that's hard to quantify. Rebuilding trust will take time."

NEW CEO IS AN INSIDE MAN

Doustdar, an Iranian-born, Austrian national, who grew up in the United States, joined Novo in 1992 and will take on the new role on August 7. 

Doustdar currently serves as vice president for international operations, a role he took after leading the company's businesses first in the Middle East and then in Southeast Asia, Novo said.

"It's really a privilege to get this job," Doustdar said in his first remarks on a call with investors and analysts. "The fact that my announcement comes right after the guidance update, just makes the mandate ahead even more clear. We need to increase the sense of urgency and execute differently."

Some analysts and investors had argued that Novo should select an American, or a person with extensive experience working in the United States as its next CEO. Novo has lost its first-mover advantage in the United States this year to U.S. rival Eli Lilly ( LLY ).

The new chief executive's most urgent challenge, according to investors and analysts, is to revive Novo's performance in the United States, the largest market by far for weight-loss drugs and where they are most profitable.

Novo launched its weight-loss drug Wegovy nearly two and a half years before U.S. rival Eli Lilly's ( LLY ) Zepbound. But Zepbound prescriptions surpassed those of Wegovy this year by more than 100,000 a week.

($1 = 0.8672 euros)