COPENHAGEN (Reuters) - Leading diabetes drugmaker Novo Nordisk (NOVOb.CO) has named former oil boss Helge Lund as its new chairman as the company contends with increasing price pressure and seeks acquisitions to broaden its blood products line-up.
The man dubbed by some as Norway’s Mr Oil because of his extensive career in the oil and gas industry may be more of an expert in hydrocarbons than insulin, but his merger and acquisitions experience is a big draw for the Danish pharmaceuticals company.
Novo is on the hunt for promising assets to boost its struggling blood products business after it lost out to French rival Sanofi (SASY.PA) in the chase for Belgian biotech company Ablynx (ABLX.BR) in late January.
Novo said it dropped its pursuit of Ablynx, which is developing an experimental drug for a rare blood disorder, because it could not justify the high price required to beat Sanofi’s offer.
“In our opinion there is only one loser and that is the one that pays too much,” said CEO Lars Fruergaard Jorgensen, referencing its stance on Ablynx when investors at Thursday’s annual general meeting asked about Novo’s growth strategy for its biopharmaceutical business.
“We will stay disciplined on value but we are still looking and we hope that we will be able to manage a deal in 2018,” he added.
Novo’s biopharmaceutical sales fell by 16 percent last year.
“We are about to see Novo take on a role that we have not seen before and therefore it is important to have a chairman with experience of mergers and acquisitions,” said Sydbank analyst Soren Lontoft Hansen.
Lund oversaw Kvaerner’s (KVAER.OL) merger with Aker Maritime. He later became head of Statoil (STL.OL), where he was in charge during the oil major’s $30 billion acquisition of Norsk Hydro’s petroleum business.
In his next role as chief executive of BG Group, Lund went from being the guy doing the buying to being bought as Royal Dutch Shell’s (RDSa.L) takeover of the British oil and gas company was announced only two months after he started the job.
The 55-year old Norwegian, also a passionate fan of English soccer club Arsenal, will replace Goran Ando, who steps down after five years in the job.
Another crucial task for the new chairman will be to retain investor trust after the company cut its long-term growth revenue outlook twice within nine months in 2016.
Novo now has a long-term target of 5 percent revenue growth, a far cry from the from the double-digit growth achieved in 2015 and reflecting a more challenging diabetes market amid increased competition and price erosion.
“Helge is very strong strategically and very oriented towards growth,” said former Statoil chairman Svein Rennemo, who worked closely with Lund for several years.
Reporting by Stine Jacobsen; Editing by David Goodman