Shares of pharmaceutical giant Novo Nordisk surged more than 8% on Monday after telehealth company Hims & Hers Health announced it would stop offering its newly launched, non-FDA-approved oral weight-loss pill. The decision followed intense regulatory pressure from the U.S. Food and Drug Administration (FDA) and legal threats from Novo Nordisk, which markets the blockbuster drugs Wegovy and Ozempic.
The compounded pill, priced at just $49 for the first month, was introduced by Hims on Thursday and was based on semaglutide—the active ingredient in Novo's treatments. By Saturday, Hims reversed course, stating it made the decision after "constructive conversations with stakeholders." This swift withdrawal triggered a 14.8% plunge in Hims' stock during premarket trading on Monday.
The regulatory catalyst came on Friday when FDA Commissioner Marty Makary signaled a broader crackdown on unauthorized compounded GLP-1 drugs, citing quality, safety, and potential legal violations. Analysts from Sydbank and Jyske Bank interpreted this as a significant move to protect the market for branded treatments like Wegovy and Ozempic. "The FDA is not only declaring war on Hims & Hers’ Wegovy pill, but compounded GLP-1s in general," said Sydbank analyst Soren Lontoft Hansen.
Adding to the pressure, Novo Nordisk filed a lawsuit against Hims & Hers on Monday, seeking a permanent injunction to block the sale of compounded versions of its drugs and demanding damages. The company accused Hims of "mass marketing unapproved knock-off versions" that are "dangerous and deceptive to patients" and undermine regulatory standards, according to group general counsel John F. Kuckelman.
Despite this victory, Novo Nordisk faces severe ongoing challenges. The company's market value has fallen nearly two-thirds since its peak in June 2024. Last week, its stock dropped 17% in a single day after the company warned of "unprecedented price pressure" and forecasted that 2026 revenue and earnings could decline by up to 13%. Intense competition, particularly from rival Eli Lilly, and political pressure to lower drug prices under the Trump administration continue to weigh heavily on the company.
Analysts offered mixed views on the long-term implications. Citi noted the news provides Novo some relief from competition in the compounded pill segment but warned of persistent headwinds. SEB analysts viewed the episode as positive for Novo but suggested it could lead to heightened scrutiny of Hims' entire compounding business. Meanwhile, Bank of America and Citi slashed their price targets for Hims, with Citi downgrading its target to $16.5 from $30 and maintaining a sell rating, citing significant legal and regulatory risks.
