Hims & Hers shares plunge in fight over GLP-1 alternatives
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Hims & Hers shares plunged Monday after Novo Nordisk filed a lawsuit and federal regulators called for an investigation into Hims' compounding strategy for GLP-1 drugs.
Why it matters: Novo's legal offensive escalates an ongoing feud as it moves to defend its crown-jewel drug franchise amid price pressure and rising U.S. competition — and puts at risk a Hims business line that's been central to the telehealth company's growth.
Catch up quick: Hims said this weekend that it would no longer sell compounded versions of Novo's new Wegovy pill.
- That came after the Department of Health and Human Services referred Hims to the DOJ to review whether the company violated federal law.
- Also Friday, the FDA warned it would take "decisive steps" to restrict GLP-1 active ingredients intended for use in non-FDA-approved compounded drugs that are mass-marketed by companies, including Hims & Hers.
Driving the news: None of those actions were enough to stop Novo from filing a lawsuit against Hims for patent infringement.
- Novo is accusing Hims of selling unapproved knockoff versions of Wegovy and Ozempic that bypass FDA review, Novo general counsel John F. Kuckelman said in a statement.
- The statement specifically notes Hims' launch of a pill shortly after Novo's launch of its Wegovy pill, though the lawsuit covers injectable versions of Hims semaglutide products as well.
In additional comments to CNBC, Kuckelman noted that Novo is specifically targeting "unlawful mass compounding."
Context: Compounded versions of branded drugs are permissible in individual cases, such as when a patient is allergic to a specific ingredient.
- It is not permitted when a compounder is "producing mass stocks of what you're calling a personalized medicine, which is really just a dosage variation," Kuckelman told CNBC.
The other side: Hims on Monday called the lawsuit "a blatant attack by a Danish company on millions of Americans who rely on compounded medications for access to personalized care."
- The company accused Big Pharma of "weaponizing the US judicial system to limit consumer choice" and said it would fight the case.
Threat level: Hims' retreat indicates it believes the FDA could begin enforcing compounding restrictions, multiple sources tell Axios Pro's Brock E.W. Turner.
- The risk of the FDA's statement is that it will apply not just to oral GLP-1 treatments but to the injectable versions as well, according to a research note from Bank of America analyst Allen Lutz.
- Lutz estimated that Hims generated $825 million to $850 million in injectable GLP-1 sales in 2025 with EBITDA margins of about 10%.
Zoom out: When there were widespread shortages of GLP-1 drugs in recent years as drug companies ramped up production, compounding pharmacies were temporarily allowed to market their own versions as alternatives.
- Those shortages have ceased — and the drug companies want those alternatives off the market.
What we're watching: Advocates say Americans deserve access to compounded drugs, and are concerned about how broad a ruling regulators may apply.
- "I think it's clear that Americans support the access to GLP-1s that compounding affords when a prescriber judges a custom formulation is needed," Scott Brunner, CEO of the Alliance for Pharmacy Compounding, tells Axios in an email.
- He alleged the FDA was showing the "potential for overreach" and called Makary's statement "a sledgehammer, when a scalpel may be the better tool."
The impact: The opposition from the FDA and Novo sent Hims shares down 16% Monday. Novo shares closed up 3.6% in the U.S.
