Shares of Hims & Hers Health Inc. (NYSE: HIMS) plummeted more than 30% on Monday, marking the telehealth company’s steepest single-day drop on record.
The dramatic decline followed Novo Nordisk’s sudden termination of its partnership with the digital healthcare provider—an unexpected development that is sending ripples across the telehealth and pharmaceutical sectors.
The two companies had previously collaborated to provide access to Wegovy, Novo Nordisk’s blockbuster weight-loss drug, through Hims & Hers’ digital platform.
With obesity treatment emerging as a lucrative and fast-growing category in telehealth, the split raises pressing questions about regulatory oversight, supply chain ethics, and the sustainability of telehealth models built around weight-loss medication.
A Strategic Relationship Suddenly Ends
Novo Nordisk officially ended its partnership with Hims & Hers citing concerns over Hims’ continued marketing of compounded semaglutide, the active ingredient in Wegovy and Ozempic.
This came even after the U.S. Food and Drug Administration (FDA) declared that branded semaglutide drugs were no longer in shortage—a key legal threshold that invalidates broad compounding exceptions.
In a public statement, Novo Nordisk accused Hims & Hers of failing to align with safety standards, alleging that the company “continued to offer unauthorized versions of semaglutide that may not meet quality and regulatory criteria.”
The statement pointed to potential patient safety risks associated with compounded formulations that could be sourced from unverified suppliers or overseas manufacturers.
For Hims & Hers, which had capitalized on a wave of demand for GLP-1 agonists by offering more affordable compounded alternatives, the decision is a significant operational blow.
Market Response: A 30% Wipeout
Investors responded immediately. HIMS stock dropped by over 33% in intraday trading on June 23, closing sharply lower and erasing hundreds of millions in market value.
The company had previously ridden a wave of investor optimism fueled by expanding GLP-1 offerings and broader telehealth adoption.
With the Novo partnership serving as a credibility boost and growth engine, its sudden dissolution now leaves investors re-evaluating both near-term earnings potential and long-term business viability.
Some analysts warned that Hims & Hers’ reliance on compounded semaglutide had become a regulatory liability, particularly in a post-shortage environment where FDA rules are tightening and enforcement scrutiny is increasing.
Legal and Regulatory Overhang
This episode underscores a growing compliance challenge facing digital health companies that straddle the line between personalized medicine and mass-market pharmaceutical distribution.
While FDA rules allow compounding under limited conditions, mass marketing and distribution of compounded drugs—especially when brand-name versions are widely available—is considered off-limits.
The FDA’s updated guidance on semaglutide, issued earlier this year, made it clear that widespread compounding would no longer be tolerated.
In that context, Hims’ decision to continue offering compounded versions of Wegovy placed it in direct conflict with both regulatory standards and Novo Nordisk’s commercial interests.
Regulatory experts now expect heightened scrutiny of how telehealth companies manage supply chains, especially when distributing controlled or high-demand medications.
Hims & Hers Responds: Doubling Down on “Choice”
In response to the breakup, Hims & Hers CEO Andrew Dudum pushed back against the allegations, describing Novo Nordisk’s decision as “anti-competitive” and “misaligned with the needs of patients.”
Dudum emphasized that Hims would continue to offer both branded and compounded versions of medications when legally permissible and clinically appropriate.
He further stated that “patients deserve options,” pointing to affordability challenges and long wait times associated with branded weight-loss drugs. Hims, he said, would remain committed to a broad treatment portfolio and direct-to-consumer access.
Despite the defiant tone, industry watchers suggest Hims now faces an uphill battle in restoring investor confidence, especially if further regulatory action looms.
Implications for the Telehealth Industry
This development is more than just a company-specific crisis. It represents a broader inflection point for the telehealth industry, which has rapidly expanded into new therapeutic areas such as weight loss, dermatology, mental health, and sexual wellness.
The break with Novo Nordisk could spark a re-evaluation of partnerships between traditional pharmaceutical manufacturers and digital health platforms.
It may also encourage telehealth startups to adopt more cautious approaches when navigating regulatory gray zones, particularly around drug compounding and off-label use.
Meanwhile, competitors such as Eli Lilly, which has steered clear of compounding arrangements while promoting its rival drug Zepbound, may find themselves in a stronger strategic position.
Looking Ahead
As the dust settles, Hims & Hers will need to carefully recalibrate its business strategy. While its brand remains strong among younger consumers, and its subscription model offers valuable recurring revenue, the loss of Wegovy distribution rights is a material setback.
Investors and patients alike will be watching closely to see how the company adapts. Whether through new partnerships, diversification of treatment areas, or greater regulatory alignment, the path forward will require both strategic clarity and reputational repair.
In the high-stakes world of telehealth and weight loss, one misstep can be costly. For Hims & Hers, the next moves could determine not just recovery—but survival.
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