Hims & Hers stock plunges after Novo Nordisk ends its brief partnership
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- Hims & Hers stock fell 35% after Novo Nordisk ended their partnership on Monday.
- Novo Nordisk stopped the deal because Hims sold a cheaper version of Wegovy.
- Hims' stock has fluctuated with developments in the weight loss drug market.
Hims & Hers stock plunged 35% on Monday after its collaboration with Novo Nordisk came to a halt.
The Danish pharmaceutical giant said it was ending the partnership because Hims is selling and promoting a cheaper copycat of Novo's blockbuster weight loss drug, Wegovy.
"Hims & Hers Health, Inc. has failed to adhere to the law which prohibits mass sales of compounded drugs under the false guise of 'personalization' and are disseminating deceptive marketing that put patient safety at risk," Novo said in a statement on Monday.
Novo added that according to its investigation, telehealth companies that compound semaglutide drugs use ingredients "manufactured by foreign suppliers in China."
Novo said that Hims would no longer have direct access to Wegovy. Novo's stock closed more than 5% lower on Monday.
In a statement on X on Monday, Hims' CEO Andrew Dudum said Novo was being anti-competitive and that Hims will continue to provide a range of treatments, including Wegovy.
"In recent weeks, Novo Nordisk's commercial team increasingly pressured us to control clinical standards and steer patients to Wegovy regardless of whether it was clinically best for patients," he wrote. "We refuse to be strong-armed by any pharmaceutical company's anticompetitive demands that infringe on the independent decision making of providers and limit patient choice."
Hims' stock has been on a roller coaster this year, with shares dropping and jumping sharply on new developments in the weight loss drug industry.
At the end of April, Hims stock surged 20% after Novo announced a long-term collaboration with Hims to make obesity treatments accessible on the Hims platform.
The announcement came just months after Hims' CEO said that the company would no longer sell compounded versions of Novo's weight loss drugs. Instead, it would sell "personalized" dosages of Wegovy under rules allowing it for clinical reasons such as decreased side effects. The company's stock fell over 19% following Dudum's remarks on Novo.
The company was allowed to make legal copies of Novo's weight loss and diabetes drugs Ozempic and Wegovy during a shortage that began in 2022. In February, the US Food and Drug Administration removed semaglutide injection products from its shortage list and gave compounders 60-90 days to stop making copies.
Hims is up 74% this year. Novo is down 19% this year on worries that the company is rapidly losing market share to American pharmaceutical rival Eli Lilly.
Hims and Novo did not immediately respond to a request for comment.