Novo Nordisk is abandoning its cell therapy operations entirely, including a potentially curative type 1 diabetes program, as new CEO Maziar Mike Doustdar implements a sweeping restructuring to refocus the Danish pharmaceutical giant on its core diabetes and obesity business.
The company will lay off nearly all 250 employees in its cell therapy division, according to Danish outlet Borsen, as it seeks partners to continue developing these therapeutic innovations. "We are in the process of identifying partners with the right capabilities and manufacturing capacity to further develop our innovations" in cell therapy, a Novo spokesperson confirmed to Fierce Biotech.
Type 1 Diabetes Program Terminated
The cell therapy exit will end Novo's ambitious type 1 diabetes program, which aimed to develop glucose-responsive insulin, delivery devices and potentially curative stem cell therapies. The company's pipeline currently lists a glucose-sensitive insulin candidate in Phase I development, which will be discontinued as part of the restructuring.
Novo was testing cell therapy to generate insulin-producing beta cells for patients with type 1 diabetes in preclinical studies, representing a potential breakthrough approach to treating the autoimmune condition that destroys the body's ability to produce insulin.
Broader Therapeutic Areas Affected
Beyond diabetes, Novo is also terminating cell therapy programs for Parkinson's disease and chronic heart failure. The company had been developing a cell therapy candidate for Parkinson's disease in early-stage trials.
Earlier this month, Novo terminated its $598 million collaboration with Tokyo-based cell therapy specialist Heartseed, which had received $55 million upfront from Novo in 2021 to develop a cell therapy-based treatment for heart failure.
Strategic Refocus Under New Leadership
The cell therapy shutdown represents a key component of Doustdar's strategic realignment since taking over as CEO. During Novo's Q2 earnings call in August, he outlined his priorities: "We're going to focus more on diabetes and obesity as this is our main core and always has been."
Doustdar emphasized the need for operational efficiency, stating during the investor call: "We need to reallocate and look at our cost base and really put the money where the growth is." The CEO is reassessing Novo's spending across "all business areas and regions" with goals to "simplify structures, reduce duplication and sharpen focus."
Massive Cost-Cutting Initiative
The cell therapy exit is part of a broader restructuring that will cut 9,000 employees across Novo's worldwide operations, representing an 11% reduction in headcount. This initiative is designed to generate approximately $1.25 billion in annualized savings through 2026.
The company has already begun implementing layoffs at its largest U.S. manufacturing site for blockbuster obesity and diabetes drugs, according to LinkedIn posts reviewed by Reuters.
Strategic Acquisitions Continue
Despite the cost-cutting measures, Novo announced on Thursday it would acquire U.S.-based Akero Therapeutics for up to $5.2 billion to gain access to a promising liver disease drug candidate, marking the first major deal under Doustdar's leadership to drive growth in strategic areas.
