Shares of telehealth and direct‐to‐consumer wellness company Hims & Hers (NYSE: HIMS) plunged more than 30 percent Monday—marking the steepest single‐day drop since going public—after pharmaceutical giant Novo Nordisk unexpectedly ended their month long collaboration to distribute Wegovy, its flagship GLP 1 weight loss medication.
Hims & Hers began as a platform offering treatments for hair loss, sexual health, hypertension, and anxiety. Its 2021 SPAC merger and subsequent push into weight loss drugs powered explosive growth: revenues nearly doubled in Q1 2025 to $586 million, largely propelled by GLP 1 sales—including compounded versions of semaglutide—and it even posted its first annual profit.
Novo Nordisk, headquartered in Denmark, is the maker of Wegovy and Ozempic. The company saw its stock rise thanks to the obesity drug boom, reaching record revenues in 2024, but shares have returned about 30–50 percent this year amid intensifying competition and delays in pipeline assets.
Why the Partnership Fell Apart
Announced in late April, the partnership allowed Hims to offer Wegovy via its new “NovoCare Pharmacy,” capitalizing on newly lifted FDA shortages. But Novo Nordisk pulled the plug after concluding that Hims continued to promote and sell compounded semaglutide in “mass quantities under the false guise of ‘personalization’,” branding the practice as “illegal” and potentially unsafe. Novo’s U.S. operations head Dave Moore urged telehealth firms to commit to patient safety, warning against “deceptive marketing” of illicit compounds.
Hims co founder and CEO Andrew Dudum countered that Novo sought to pressure the company into steering patients exclusively to Wegovy and compromising clinical decision making. He accused Novo of misleading the public and attempting to “strong arm” Hims into restrictive, anticompetitive practices.
What Is Semaglutide?
Semaglutide is the active ingredient in two of Novo Nordisk’s blockbuster drugs: Ozempic (approved for type 2 diabetes) and Wegovy (approved for chronic weight management). It’s a GLP-1 receptor agonist—a drug that mimics the gut hormone GLP-1 to regulate blood sugar, slow digestion, and suppress appetite. Its success has made semaglutide a cornerstone of the new global anti-obesity drug market, with multi-billion-dollar annual sales.
Why Are Compounded Versions Being Used?
Due to soaring demand and widespread shortages of branded Wegovy, compounding pharmacies in the U.S. began preparing their own versions of semaglutide under a legal loophole in FDA regulations that allows compounding when a brand-name drug is on the FDA’s shortage list.
Telehealth platforms like Hims & Hers began sourcing and prescribing these compounded versions—claiming to offer more affordable, customizable treatments to meet demand, often at a fraction of the branded cost.
Why Did Novo Nordisk Call It Unsafe and Illegal?
Novo Nordisk strongly opposes the compounded versions for three key reasons:
- Safety and Quality Concerns
Novo Nordisk argues that many compounding pharmacies are using semaglutide sodium or semaglutide acetate, which are not the FDA-approved forms used in Wegovy or Ozempic. These chemical variants have different molecular structures or salt forms and have not been evaluated for safety or efficacy in humans. The FDA itself has warned consumers not to use compounded semaglutide containing semaglutide salts, calling it potentially unsafe. - Violation of Intellectual Property and Exclusivity
Compounded semaglutide circumvents Novo’s intellectual property rights, especially when not truly medically necessary. Novo has filed lawsuits and cease-and-desist letters against pharmacies and clinics offering such versions, arguing that most are not legally compounding for individualized need but are mass-producing copycats for profit. - Regulatory and Ethical Risk
Novo considers the promotion of compounded semaglutide to be misleading and deceptive, particularly when telehealth firms market it as a safe or legitimate alternative. The company contends that this undermines both patient safety and trust in pharmaceutical standards. In a public statement, Novo emphasized that “illicit compounding threatens patient safety and violates the law when done outside permitted boundaries.”
Performance During the Alliance
During the brief wrap of their collaboration, HIMS stock had rebounded modestly—up more than 20 percent on the partnership’s announcement . Meanwhile, Hims was positioning itself as a nimble alternative to Big Pharma, delivering semaglutide at approximately $165–$199 per month compared to Wegovy’s $499 list price through NovoCare. Analysts viewed the collaboration as a temporary solution bridging the FDA’s lifted compounding exceptions and the return of branded supply.
Aftermath and Market Impact
With the collaboration terminated, Hims can no longer offer branded Wegovy. Its stock opened at $44–45, down from the high $60s last week. Novo Nordisk stock also slid roughly 5 6 percent amid the shake up and simultaneous setbacks in ongoing trials.
Hims is now forced to scale back its workforce following FDA regulations that invalidated compounded semaglutide—plans already signaled late May with a ~4 percent headcount reduction. The company says it is pivoting toward other treatments (e.g., low testosterone, menopause, sleep, longevity) and continuing to pursue “personalized” dosing in compliance with FDA guidelines.
Novo Nordisk, despite the hiccup, continues leveraging its core branded business and broader GLP 1 pipeline. Analysts recommend a wait and see approach: NVO’s fundamentals remain strong, even as growth cools; HIMS, on the other hand, faces sharp uncertainty without GLP 1 momentum.
Investor Takeaways
For investors in Hims & Hers, the abrupt end of the Wegovy distribution deal introduces material risk. The company had leaned heavily on its GLP 1 offerings—accounting for nearly $200 million of 2024 revenue—and now faces both regulatory and distribution headwinds. Without rapid expansion into alternate therapies or securing new branded drug partnerships, HIMS may struggle to support its valuation.
Novo Nordisk investors should view this episode as a defensive adjustment aimed at protecting long term brand integrity and patient safety. While the move triggered short term volatility, NVO’s diversified GLP 1 portfolio and scale keep its long term outlook positive—though competition and trial delays in the obesity space remain concerns.
