Novo Nordisk Ends Wegovy Deal, Hims & Hers Shares Plunge

Novo Nordisk announced it would terminate its Wegovy weight-loss drug agreement with Hims & Hers Health, causing a significant drop in Hims shares. The end of this collaboration stems from legal issues surrounding the continued supply of compounded semaglutide, the drug's active ingredient, leading to market uncertainties.

Novo Nordisk confirmed on Monday it would cease its agreement with U.S. telehealth firm Hims & Hers Health regarding its Wegovy weight-loss drug, prompting a 31% dip in Hims shares during morning trading.

This decision follows the companies' April collaboration, in which Hims & Hers began selling Novo's Wegovy via a bundled offering. With the collaboration ending, Hims' ability to sell branded Wegovy drugs ceases, especially given its supply of compounded semaglutide, against legal stipulations, as the drug shortage wanes.

The FDA had previously permitted compounded versions amid shortages, with Hims marketing them at $165 monthly under claims of personalization. However, Wall Street analysts remain skeptical about the legitimacy of these offerings as Novo condemns the mass production of replicas. Legal developments continue as a federal judge supports the FDA's removal of semaglutide from the shortage list, maintaining the ban on compounded copies.

(With inputs from agencies.)