HSBC's Rajesh Kumar on Novo Nordisk: We want to see management team execute turnaround strategy

Leadership & Governance - Novo Nordisk is undergoing a major shakeup with the chairman, vice chair, and five independent board members not standing for reelection [1] - This follows the ousting of the CEO in May and the appointment of a new CEO in August [1] - The foundation, the largest shareholder with the most voting rights, desires an accelerated change in Novo's direction [3] - The foundation can now have a larger impact on the new management team, aiming for a turnaround [4] Market Dynamics & Competition - The obesity market is shifting towards direct-to-consumer approaches, with Eli Lilly leading this trend [3][7] - Eli Lilly has a second-mover advantage, demonstrating superior execution on supply chain management compared to Novo Nordisk's Viggovi launch [6] - Eli Lilly's direct-to-consumer approach has resulted in nearly 40% market share in the US, while Novo Nordisk is still progressing in that direction [7] Challenges & Opportunities - Novo Nordisk has faced a series of crises, including warning slow downs, shortages, compounders issues, management change, and now board change [4] - Equity risk for Novo Nordisk is potentially to the upside, driven by upcoming clinical trial results [5] - Confidence in Novo Nordisk's ability to capitalize on obesity market growth is currently shaken, requiring the new management team to execute a turnaround strategy [5] Pricing & Market Potential - The key question is who will pay for these obesity drugs, despite their effectiveness [8] - The potential market size of $120 billion to $150 billion is viewed with skepticism regarding payment mechanisms [8]