Hims & Hers Health, Inc. HIMS is currently experiencing a decline in its stock price, trading lower on Monday. The company’s stock has plummeted approximately 18% over the past month, reflecting recent challenges.
A significant development contributing to this decline occurred in June 2025, when Novo Nordisk A/S NVO ended its collaboration with Hims & Hers. Consequently, Hims & Hers will no longer have direct access to Wegovy, Novo Nordisk’s popular GLP-1 weight-loss drug, through the NovoCare Pharmacy.
Novo Nordisk stated in a press release that the termination was due to Hims & Hers Health’s alleged failure to adhere to laws prohibiting mass sales of compounded drugs under the false guise of “personalization” and its use of deceptive marketing practices, which Novo Nordisk claimed disregarded patient safety.
Also Read: Wegovy, Zepbound Prices Drop, But Most Patients Still Can’t Afford Long-Term Use: ‘Coverage Is Not The Same As Access,’ Says Expert
This split represents the latest challenge facing Hims & Hers, even as the company aims to achieve $6.5 billion in revenue and $1.3 billion in Adjusted EBITDA by 2030.
Hims & Hers Health shares are under pressure largely because the firm sells cheaper, compounded versions of popular weight-loss drugs. Regulators typically permit compounded versions of drugs to enter the market to meet demand when there’s an official shortage of the brand-name product.
However, the FDA announced earlier this year that semaglutide, the active ingredient in Wegovy, had been removed from the drug shortage list, indicating that supply was now sufficient to meet current and projected demand. This change had a notable impact on Hims & Hers.
Despite this, the company reported significant success in its GLP-1 offerings, generating over $225 million in revenue in 2024 from these products. The ongoing legal and regulatory scrutiny now centers on the legality of mass-producing compounded versions once the official shortage is declared over.
Morgan Stanley, in a Monday note, highlighted an “increased focus on both the legal and business implications that could influence the stock.” Analysts spoke with two experts to gain insight into these implications, particularly concerning Eli Lilly And Co.’s LLY lawsuits against compounders.
Analyst Craig Hettenbach says that Expert #1 cautiously advised compounding pharmacies to cease large-scale production of GLP-1 drugs once the shortage ends, acknowledging that business owners have varying levels of risk tolerance.
Expert #2 offered a more nuanced perspective, suggesting there might be a legitimate case for compounding GLP-1s under 503A for specific patient groups, even if the drugs are not individually tailored. Nevertheless, Expert #2 admitted that little legal precedent supports this view and believed that merely adding a vitamin to a GLP-1 would likely not render the product legally compliant under 503A, a common practice among some compounders.
Both experts indicated that even if the current cases are dismissed, Eli Lilly could refile with stronger arguments. Presently, the compounders are seeking dismissal of the lawsuits, contending that Eli Lilly, as a private company, cannot make certain claims that fall solely under the FDA’s jurisdiction.
The two experts discussed whether it would be helpful to ask for a preliminary injunction, a court order to stop the compounders from operating during the case. Expert #2 thinks it will be hard for Lilly to get one because the company would need to prove it’s suffering serious, irreversible harm.
Without that injunction, the compounders can keep running their businesses while the cases are ongoing. Both experts stressed that each case depends heavily on the specific facts, so gathering evidence and going through the legal process will take time. A final decision in these cases will probably take 2 to 3 years.
In light of these developments, Morgan Stanley has maintained its Equal Weight rating on Hims & Hers Health, with a price forecast of $40.
Earlier in June, the company announced a significant step in its global expansion through its agreement to acquire ZAVA, a digital health platform in Europe.
The strategic move will expand Hims & Hers’ footprint in the United Kingdom and officially launch the company into Germany, France, and Ireland, with more markets anticipated soon.
Price Action: HIMS stock is trading lower by 5.51% to $45.38 at last check Monday.
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