Hims & Hers stock slide after FDA warns against copycat drugs
Novo Nordisk (NVG) might have a powerful ally in its corner for its ongoing dispute with Hims & Hers Health, Inc. (HIMS) over the latter's copycat version of the Danish healthcare company's popular weight loss drugs.
Novo's stock sank 8.2% on Thursday after Hims launched a copycat version of the Danish healthcare company's Wegovy weight loss pill, with a starting price $100 cheaper than the original.
The company immediately released a statement after the Hims launch, accusing its rival of "illegal mass compounding" that it says "poses a significant risk to patient safety."
Novo's Wegovy pill has a starting price of $149, while Hims's copycat pill starts at $49.
"Novo Nordisk will take legal and regulatory action to protect patients, our intellectual property and the integrity of the US gold-standard drug approval framework," the company said in its statement.
Hims fired back in a statement on X, saying that it "is not the first time (nor will it be the last time) a big pharma company has suggested taking an accessible, customer-first approach to healthcare is dangerous, illegal, or bad for the marketplace."
"This narrative is as predictable as it is outdated and false," the company said.
FDA could take 'swift action' against Hims
The drug released by Hims is a “Compounded Semaglutide Pill with the same active ingredient as Wegovy." The company noted that compounded drugs “are not approved or evaluated for safety, effectiveness, or quality by the FDA.”
But it turns out Novo wasn't the only one raising red flags about the new copycat weight-loss drug.
Without naming Hims directly, Marty Makary, commissioner of the US Food and Drug Administration (FDA), posted a statement on X in which he appeared to be referencing the company's new drug, which had been announced just hours earlier.
“FDA will take swift action against companies mass-marketing illegal copycat drugs, claiming they are similar to FDA-approved products,” Makary said. “The FDA cannot verify the quality, safety, or effectiveness of non-approved drugs.”
Hims has not yet responded to the FDA's warning.
This is not the first time that Hims has faced pressure from the FDA over the marketing of its compounded drugs.
The agency sent a letter to CEO Andrew Dudum in September alleging that his company’s claims about its compounded semaglutide products that are used for weight loss are “false or misleading.”
The FDA temporarily allowed compounded GLP-1 drugs during a supply shortage when Ozempic first made a splash with consumers, but after the shortage ended, those alternatives are technically illegal.
Shares of Hims fell 10% in after-hours trading on Thursday. It slid nearly 2% on Friday.
Novo's shares gained nearly 10% on Friday, getting a boost from Markay's statement.
TD Cowen analyst Jonna Kim reiterated a Hold rating on Hims' shares and maintained a $30 price target, stating in a client note on Friday that it has the potential "to drive new customer acquisition with lower entry pricing."
Kim added that the company's launch of its new compounded drug is "seen as a strategic defense, but execution and legality remain key uncertainties."
Meanwhile, President Trump announced on Thursday evening the launch of the government's new TrumpRX platform, which is a direct-to-consumer website where Americans can buy prescription drugs directly from drugmakers at reduced prices.
Novo is offering its Wegovy pill at a 78-89% discount off its normal market price, saving customers just over $1,200 on a 30-tablet prescription.