Novo Nordisk Stock Surges as Hims Halts Copycat Wegovy Pill

Introduction

Shares in Novo Nordisk, the maker of blockbuster weight-loss drugs Wegovy and Ozempic, surged 8.4% in early European trading on Monday. The rally followed a decision by telehealth provider Hims & Hers to halt its plans to offer a lower-cost, compounded version of Novo's popular weight-loss pill. This development marks the latest turn in a volatile period for the Danish pharmaceutical giant, highlighting the intense battle over the lucrative market for GLP-1 drugs and the growing regulatory scrutiny of compounded medications.

A Volatile Week for Novo Nordisk

The recent stock recovery comes after several days of sharp price swings for Novo Nordisk. Last week, the company's shares fell 17% in a single day after it announced that sales and earnings would drop significantly this year. The forecast was attributed to price reductions on its GLP-1 drugs following a deal with the U.S. government, alongside mounting competition and imminent patent expirations. The situation was further complicated by the persistent issue of U.S. compounding pharmacies producing unapproved, cheaper versions of its drugs.

The stock took another hit on Thursday, dropping 7.9% after Hims & Hers announced it would introduce a copycat pill containing semaglutide, the same active ingredient in Wegovy. Hims planned to price its version at an initial $19 per month, rising to $19, significantly undercutting the $149 monthly price for Novo Nordisk's FDA-approved Wegovy for self-paying customers. Novo Nordisk immediately threatened legal action in response.

However, the tide began to turn on Friday when FDA Commissioner Marty Makary promised swift action to clamp down on illegal copycat drugs, causing Novo's shares to rebound by 5.3%. The momentum continued over the weekend, culminating in Hims & Hers scrapping its plan entirely.

Regulatory Intervention and Hims' Reversal

The decision by Hims & Hers was not made in a vacuum. Over the weekend, the U.S. Department of Health and Human Services referred the telehealth company to the Department of Justice for an investigation into potential violations of the Federal Food, Drug, and Cosmetic Act. This decisive regulatory pressure appeared to be the final catalyst for Hims' change of course.

In a statement, Hims & Hers confirmed the reversal: "Since launching the compounded semaglutide pill on our platform, we've had constructive conversations with stakeholders across the industry. As a result, we have decided to stop offering access to this treatment." This move was seen by analysts as a significant victory for Novo Nordisk in its fight to protect its market and ensure patient safety.

Background of a Fractured Partnership

The recent conflict is rooted in a deeper, more complex history between the two companies. In April 2025, Novo Nordisk and Hims & Hers announced a partnership to expand affordable access to the FDA-approved Wegovy through the Hims platform. The collaboration was intended to transition patients from the gray market of compounded drugs to the regulated, branded product as supply shortages eased.

However, the partnership collapsed dramatically in June 2025, lasting less than two months. Novo Nordisk terminated the agreement, accusing Hims & Hers of "illegal mass compounding and deceptive marketing." Novo alleged that Hims continued to sell compounded drugs under the "false guise of 'personalization'" even after the official FDA shortage designation was lifted, thereby violating the law and putting patient safety at risk. The termination caused Hims & Hers' stock to plummet by over 30% in a single day.

Conflicting Accusations

Novo Nordisk's position was firm. The company stated that its investigation found that ingredients used in knock-off drugs sold by telehealth platforms were often sourced from foreign suppliers in China with minimal FDA oversight. "U.S. patients should not be exposed to knock-off drugs made with unsafe and illicit foreign ingredients," the company declared.

Hims & Hers CEO Andrew Dudum fired back, accusing Novo Nordisk of anticompetitive behavior. In a post on the social media platform X, he claimed Novo's commercial team pressured Hims to steer patients toward Wegovy, infringing on the independence of healthcare providers. "We refuse to be strong-armed by any pharmaceutical company’s anticompetitive demands," Dudum stated.

Market Impact and Analyst Commentary

The fallout from the terminated partnership and the recent regulatory action has significant implications. Analysts at SEB noted that the increased scrutiny on Hims & Hers could extend to its entire GLP-1 compounding business and affect other players in the space. Following the partnership's collapse, Needham downgraded HIMS stock to "Hold," citing significant legal risk and a competitive disadvantage.

The core issue is the booming demand for GLP-1 drugs, which has created a chaotic gray market. Compounding pharmacies stepped in to fill supply gaps during shortages, but some continued to produce copycat versions using regulatory loopholes even after supplies stabilized. The FDA's stance and Novo's legal actions represent a concerted effort to rein in this practice.

Conclusion

Novo Nordisk's recent stock rally underscores the market's positive reaction to the successful defense of its intellectual property against compounded alternatives. The intervention by U.S. federal agencies signals a turning point, suggesting that regulatory bodies are taking a harder line on the sale of unapproved compounded drugs by telehealth platforms. While this is a clear win for Novo Nordisk, the broader battle for control over the multi-billion dollar weight-loss drug market is far from over. The industry will be watching closely to see how this increased scrutiny impacts other compounding pharmacies and telehealth providers moving forward.