Hims stock plunged 34%; Here’s why

Shares of telehealth company Hims & Hers plunged 34% on June 23, 2025, after pharmaceutical giant Novo Nordisk terminated a partnership, accusing Hims of improperly selling and promoting unapproved, compounded versions of its blockbuster weight-loss drug, Wegovy.

Hims & Hers is a U.S.-based telehealth company that offers online doctor consultations and delivers treatments for common health issues like hair loss, acne, sexual wellness, and mental health. The move by Novo Nordisk abruptly ends a partnership announced in April and sparks a public clash, highlighting rising tensions between traditional drugmakers and the fast-growing telehealth industry.

Let’s break down what happened between Novo Nordisk and Hims & Hers, in detail.

Hims-Novo Nordisk Deal: What blew up?

The fallout between Hims & Hers and Novo Nordisk is about compounded drugs, these are custom-made versions of medicines prepared by pharmacists when there is a shortage or when a patient can’t take the standard version due to allergies or other medical reasons.

During a U.S. shortage of the popular weight loss drug Wegovy, Hims offered these compounded alternatives. But the shortage officially ended in May 2025, meaning companies could no longer legally make and sell these versions in large quantities.

Novo Nordisk, which makes Wegovy, accused Hims of continuing to sell these unapproved versions and using misleading marketing. They said Hims was pretending to offer personalized care while actually breaking the rules, so they ended the partnership.

Imagine there’s a famous bakery that runs out of its best-selling cake. During that time, a small home baker is allowed to make a similar version to help meet the demand. But once the bakery has enough stock again, the home baker is expected to stop selling that version. Instead, they keep promoting their version as “specially made” and sell it to many customers.

That’s what happened between Hims & Hers and Novo Nordisk, causing Hims stock to plunge 34% and Novo Nordisk stock to close nearly 5% lower on June 23, 2025.

Novo Nordisk’s allegation and Hims’ response

In a sharply worded statement, Novo Nordisk said Hims & Hers "failed to adhere to the law which prohibits mass sales of compounded drugs" under the "false guise" of personalization. The Danish drugmaker also accused Hims of "deceptive" marketing that puts patient safety at risk.

"We expected that the efforts towards compounding personalization would diminish over time. When we didn’t see that, we had to make a choice on behalf of patients," said Dave Moore, Novo Nordisk’s executive vice president of U.S. operations. 

Hims & Hers CEO Andrew Dudum fired back on social media platform X, calling Novo Nordisk's statements misleading. Dudum alleged that Novo's commercial team had "increasingly pressured us to control clinical standards and steer patients to Wegovy regardless of whether it was clinically best for patients." He affirmed that Hims would not "compromise the integrity of our platform to appease a third party."

Weight Loss Drugs: A High-Stakes Market

The dispute comes amid a global boom in demand for next-generation weight-loss drugs called GLP-1 agonists, which include Novo Nordisk’s Wegovy, Ozempic and Eli Lilly’s Zepbound. These drugs are reshaping the obesity treatment landscape.

Weight Loss Drug Market Growth & Forecasts

Source: Morgan Stanley, Goldman Sachs and Grandview Research

As demand for these treatments skyrockets, companies behind the leading drugs are fiercely protecting their market share. Novo Nordisk, in particular, is deeply invested in safeguarding the success of its flagship product, Wegovy.

Wegovy: A Blockbuster Drug for Novo Nordisk

Source: Novo Nordisk Earnings report

With such high stakes, protecting Wegovy’s market position is critical for Novo Nordisk, and any perceived threat, such as compounded alternatives, is met with strong resistance.

It is worth noting that in 2024, Hims & Hers generated about $200–225 million from compounded GLP-1 drugs as part of its weight loss business. The company’s total revenue in 2024 was $1.48 billion, with non-GLP-1 offerings accounting for $1.2 billion, indicating the weight loss drug segment was a rapidly growing part of its business

Telepath Vs Traditional pharma: A New Battleground

The fallout between Hims & Hers and Novo Nordisk marks a turning point for the telehealth industry. Citi analyst Daniel Grosslight calls it “a clear warning shot” that significantly raises legal risks for digital health platforms. Novo has made it clear it will only work with partners that share its commitment to safe, approved treatments, and plans to escalate its efforts with the FDA to curb illegal compounding. 

Disclaimer:

The content is meant for education and general information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Past performance is not indicative of future returns. The securities are quoted as an example and not as a recommendation. This in no way is to be construed as financial advice or a recommendation to invest in any specific stock or financial instrument. The Company strongly encourages its users/viewers to conduct their own research, and consult with a registered financial advisor before making any investment decisions. All disputes in relation to the content would not have access to an exchange investor redressal forum or arbitration mechanism. Registered office address: Office No. 507, 5th Floor, Pragya II, Block 15-C1, Zone-1, Road No. 11, Processing Area, GIFT SEZ, GIFT City, Gandhinagar – 382355. IFSCA Broker-Dealer Registration No. IFSC/BD/2023-24/0016, IFSCA DP Reg No: IFSC/DP/2023-24/010.