Novo Nordisk said Friday that CEO Lars Fruergaard Jørgensen is stepping down as the Wegovy maker seeks to revive its ailing fortunes amid increasing competition.

The Danish pharmaceutical giant said Jørgensen, who was at the helm for eight years, would remain in his post “for a period to support a smooth transition to new leadership.” It added that the search for a successor was ongoing and an announcement would be made in due course.

Novo Nordisk shares were last trading 2.3% lower. Meanwhile, shares of rival obesity drug maker Eli Lilly were 1.7% higher following the announcement.

The decision comes as Novo Nordisk’s stock price has taken a battering over the past year amid increased competition in the ballooning obesity drug market and disappointing trial results for its next-generation treatments.

The company’s share price is currently down by more than 50% since the middle of 2024.

Board chairman Helge Lund said discussions to replace Jørgensen had been ongoing for the past several weeks between Novo Nordisk and the Novo Nordisk Foundation, which controls the firm, according to Reuters.

Reuters separately reported Jørgensen as telling Danish broadcaster TV2 that he was only informed very recently and that he did not see the decision coming.

“Novo Nordisk’s strategy remains unchanged, and the Board is confident in the company’s current business plans and its ability to execute on the plans,” Lund said in a statement announcing the decision.

“The changes are, however, made in light of the recent market challenges Novo Nordisk has been facing, and the development of the company’s share price since mid-2024,” the company said in a statement.

In connection with the change, the company said that Lars Rebien Sørensen, former Novo CEO and current chair of the Novo Nordisk Foundation, will join Novo Nordisk’s board, initially as an observer.

Novo last week reported lower-than-expected first-quarter sales of its flagship Wegovy obesity drug and trimmed its full-year sales growth forecast amid increased competition from compounded drug markets in the U.S.

“Compounders took a part of our business away,” Jørgensen told CNBC’s Charlotte Reed.

The company nevertheless said that it expected sales to improve in the second half of the year as the availability of copycat compounded drugs is phased out after the Food and Drug Administration (FDA) ended its drug shortage ruling.

Novo has meanwhile struggled to shake negative sentiment following a series of disappointing trial results for its next-generation obesity drug candidate CagriSema. Jørgensen previously said that he was “very optimistic” about the prospects for the treatment.

“From the data we have, CagriSema is the best product that has been tested out or is on the market, and we believe we can get those data even better.”