Shares of Hims & Hers Health continued their downward trajectory on Tuesday, declining 5.6% to $18.25. This drop extends a steep 20% sell-off from the previous session, triggered by a significant legal challenge from pharmaceutical giant Novo Nordisk.
Legal Battle Over Compounded Semaglutide
Novo Nordisk has initiated its first U.S. patent infringement lawsuit targeting compounders of its blockbuster weight-loss drug Wegovy. The suit seeks a permanent sales ban on unapproved compounded versions of semaglutide—the active ingredient in Wegovy—and demands substantial monetary damages. Novo's general counsel described the sought amount as "a very significant figure."
Hims & Hers, which recently launched and then quickly withdrew a $49 monthly compounded semaglutide pill, has pushed back against the lawsuit. The company framed the action as a "blatant attack" on the established practice of pharmacy compounding, which it argues limits consumer choice.
Regulatory Shift Intensifies Scrutiny
The legal action coincides with a pivotal regulatory change. The U.S. Food and Drug Administration has declared that semaglutide is no longer in shortage. This status change narrows the legal pathway for pharmacies to compound the drug, which is typically permitted only to address drug shortages or for individualized patient prescriptions.
The FDA has signaled its intent to take "decisive steps" against the mass marketing of non-approved compounded GLP-1 drugs, warning of potential enforcement actions including seizures or injunctions. This creates a dual threat for Hims & Hers from both litigation and regulation.
Market and Financial Implications
Analysts suggest Novo Nordisk is declaring "war" not just on Hims's specific product, but on the broader market of GLP-1 compounders. The potential outcomes are stark: a court-ordered sales ban or a broader FDA clampdown could force Hims to rapidly reconfigure its weight-loss strategy. Meanwhile, a protracted patent fight could incur significant legal costs.
Investors are now looking ahead to the company's fourth-quarter and full-year 2025 earnings report, scheduled for February 23. The conference call is expected to feature intense questioning regarding the company's weight-loss business plans and the fallout from the ongoing legal and regulatory challenges. Hims & Hers has previously projected 2025 revenue exceeding $2.3 billion, with a long-term target of $6.5 billion by 2030.
