Novo Nordisk A/S has abruptly terminated its partnership with Hims & Hers Health Inc., just weeks after it was announced, over concerns related to the telehealth company’s sale and promotion of compounded versions of its blockbuster weight-loss drug Wegovy.
The announcement sent the share price of Hims and Hers plummeting by more than 28% on Monday. Novo’s share price fell more than 5% in Copenhagen.
It said direct access to the drug would no longer be available through Hims & Hers Health because the company “has failed to adhere to the law which prohibits mass sales of compounded drugs under the false guise of ‘personalization’ and are disseminating deceptive marketing that put patient safety at risk.”
In a statement released on Monday, Novo Nordisk said its investigation revealed that the active ingredients in Wegovy knock-offs, sold by telehealth firms and compounding pharmacies, are sourced from overseas suppliers based in China.
The drugmaker also referenced an April report from the Brookings Institution, which revealed that many Chinese suppliers had never undergone FDA inspections, and several of those that were inspected had violations related to drug quality assurance.
The move deals a fresh blow to Novo’s efforts to protect its dominance in the fast-growing GLP-1 drug category and expand its footprint in the US weight-loss market.
Dispute centers on compounded weight-loss drugs
Novo alleged that Hims violated regulations governing compounded medications, which are typically allowed only in limited, individualized circumstances, such as when branded drugs are in short supply or require slight formulation changes.
While technically permitted under US Food and Drug Administration rules, these compounded drugs cannot be mass-produced.
“Hims & Hers is disseminating deceptive marketing that puts patient safety at risk,” Novo said in a statement, accusing the platform of breaching the legal boundaries around compounding.
During an earnings call in May, Hims & Hers CEO Andrew Dudum said the company gives providers and patients a choice in their treatments.
“Ultimately what is right for them is their own discretion,” he said. “I think we strongly believe it’s really important that we maintain that independence.”
The partnership had been launched in April as part of a broader Novo Nordisk strategy to expand access to Wegovy in the US via direct-to-consumer channels, including Hims, Ro, and LifeMD.
With supply constraints easing and regulatory scrutiny of compounding intensifying, Novo aimed to regain control over how its drugs reached patients.
GLP-1 rivalry heats up as Eli Lilly gains ground
Novo’s fallout with Hims comes at a time of growing pressure from competitors, particularly Eli Lilly & Co., which has rapidly emerged as a formidable rival in the obesity drug market.
Lilly’s GLP-1 injection Zepbound has steadily captured market share, and its experimental pill orforglipron recently delivered promising trial results, helping diabetes patients shed nearly 8% of their body weight in 40 weeks, outperforming Novo’s Ozempic.
Lilly’s pipeline also includes retatrutide, a next-generation injection that led to a 24.2% weight reduction in mid-stage trials.
The company plans to file for regulatory approval of orforglipron by the end of this year, and it recently inked a partnership with Chinese biotech Laekna to co-develop a muscle-preserving obesity treatment, further expanding its portfolio.
Novo struggles to catch up
Novo Nordisk is facing increasing scrutiny over its ability to maintain market leadership.
The company last month announced it will replace long-serving CEO Lars Fruergaard Jorgensen, signaling a leadership shift at a critical time.
Despite having two of the most recognizable brands in the weight-loss and diabetes space—Wegovy and Ozempic—Novo’s shares have fallen by more than 50% over the past year.
While the GLP-1 class is widely expected to become one of the most lucrative categories in global pharmaceuticals, Novo’s recent troubles—ranging from supply shortages to aggressive competition and regulatory friction—underscore the challenges facing legacy players.
As the obesity treatment landscape evolves rapidly, Novo’s ability to regain momentum and rebuild trust—both with partners and the market—may prove decisive in the coming quarters.
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