Hims & Hers Stock Plunges As Novo Nordisk Ends Partnership Over Allegations Of Selling Knockoff Versions Of Wegovy

Shares of Hims & Hers Health Inc. (HIMS) slumped 29% on Monday morning after Danish drug maker Novo Nordisk (NVO) announced that it is halting its collaboration with the telehealth company for the sale of its blockbuster weight loss drug Wegovy.

Novo Nordisk and Hims & Hers entered into a collaboration in late April aimed at making Wegovy available on the telehealth platform.

The collaboration was part of the drugmaker's attempts to enable patients using compounded versions of the drug until recently, when Wegovy was in short supply, to transition to the company's FDA-approved Wegovy, now that supply constraints are over.

However, direct access to Wegovy will no longer be available to Hims & Hers, the drugmaker said on Monday.

Novo said that Hims & Hers failed to adhere to the law, which prohibits mass sales of compounded drugs. It alleged that the telehealth operator is promoting and selling illegitimate, knockoff versions of Wegovy.

Dave Moore, Executive Vice President, US Operations of Novo Nordisk, said that patients are entitled to receive FDA-approved Wegovy when the weight-loss treatment is prescribed by their healthcare professionals.

"We will work with telehealth companies to provide direct access to Wegovy that share our commitment to patient safety – and when companies engage in illegal sham compounding that jeopardizes the health of Americans, we will continue to take action," he added. Wegovy, containing semaglutide, is an injectable prescription medicine to help adults and children aged 12 years and older lose excess body weight.

On Stocktwits, retail sentiment around both NVO and HIMS is trending in the 'bullish' territory.

NVO stock, meanwhile, is trading 6% lower.

While NVO stock is down 21% this year, HIMS stock is up 80%.

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