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Activist hedge fund Parvus Asset Management is building a stake in Ozempic-maker Novo Nordisk as the drugmaker hunts for a new chief executive following a share price slump.
The London-based hedge fund, which has previously targeted airline Ryanair and gambling group Flutter Entertainment, wants to influence the appointment of Novo Nordisk’s new chief, according to people with knowledge of the details.
Shares in Novo Nordisk have fallen 50 per cent over the past year. A combination of disappointing trial results for its new obesity drug and lower than expected sales figures led investors to conclude that it was losing ground to its US rival Eli Lilly in the weight-loss market.
Last month, it announced that chief executive Lars Fruergaard Jørgensen would be stepping down earlier than planned, although he remains in post until a successor is found. Although it is no longer Europe’s largest listed company, Novo Nordisk still has a market capitalisation of $334bn.
Parvus did not disclose the size of its stake in Novo Nordisk and, under Danish securities rules, does not need to if it owns less than 5 per cent of the company. The activist has total shareholdings of £5.2bn, according to Bloomberg data.
Novo Nordisk, Parvus and the Novo Nordisk Foundation, the drugmaker’s largest shareholder, declined to comment.
The Novo Nordisk Foundation holds the majority of voting rights in the company, making it harder for an activist to influence its plans. The foundation’s chair, Lars Rebien Sørensen, who previously ran the drugmaker, has joined the board as an observer, as part of the process of finding a successor.
Novo Nordisk cut its sales and profit forecasts last month, blaming the rapid expansion of replica obesity drugs in the US. These cheaper alternatives were temporarily allowed when there were shortages but have cut into the market share of branded versions.
Activist investors have previously applied pressure to companies even where their shareholdings have been small: US activist investors Starboard Value and Irenic Capital, for example, waged a multiyear campaign against Wall Street Journal parent company News Corp despite the Murdoch family having priority shareholdings.
Parvus was co-founded in 2004 by former Merrill Lynch fund manager Edoardo Mercadante. It made a name for itself by successfully opposing UK bookmaker William Hill’s proposed merger with rival gambling group Amaya and UK security group G4S’s £5.2bn takeover bid for Danish facilities management company ISS.
Alongside Flutter and Ryanair, it has also previously built positions in Italian bank UniCredit, French hotel group Accor and Ipsen, another Danish drugmaker.
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