TLDR
- Novo Nordisk stock jumped 8% after Hims & Hers pulled its $49 weight-loss pill following FDA and legal pressure
- FDA signaled a broader crackdown on compounded GLP-1 drugs, reducing competitive threats to branded treatments
- Hims & Hers stock plunged 14.8% in premarket trading after discontinuing the semaglutide-based pill on Saturday
- Novo Nordisk’s market value dropped nearly two-thirds since June 2024 peak due to pricing pressures
- The FDA’s stance marks a rare victory for Novo as it battles copycat versions of Wegovy and Ozempic
Novo Nordisk shares surged more than 8% Monday morning following a weekend decision by Hims & Hers Health to cancel its $49 weight-loss pill launch. The telehealth company backed down after facing legal threats from the Danish drugmaker and pressure from the FDA.
The rally pushed Novo’s stock higher than levels seen before Hims announced its non-FDA-approved version of semaglutide. Investors interpreted the FDA’s actions as a broader crackdown on compounded GLP-1 drugs.
Hims & Hers introduced the compounded pill Thursday, sparking immediate pushback from Novo Nordisk and regulatory authorities. The product was based on semaglutide, the active ingredient in Novo’s blockbuster drugs Wegovy and Ozempic.
By Saturday, Hims said it would stop offering the treatment after “constructive conversations with stakeholders.” Shares of Hims plummeted 14.8% in premarket trading Monday.
FDA Signals Wider Crackdown on Compounded Drugs
The FDA announced Friday it would restrict GLP-1 ingredients used in non-approved compounded drugs. These medications have been marketed by telehealth firms and compounding pharmacies as cheaper alternatives to authorized treatments.
FDA Commissioner Marty Makary indicated the agency would tighten oversight of unauthorized compounded GLP-1 drugs. The regulator pointed to quality and safety concerns, as well as possible breaches of federal law.
Analysts at Sydbank and Jyske Bank said Novo’s share price reflected investors’ positive response to the FDA targeting the unregulated compounding industry. “The FDA is not only declaring war on Hims & Hers’ Wegovy pill, but compounded GLP-1s in general,” said Sydbank analyst Soren Lontoft Hansen.
The move has positive implications for both Novo Nordisk and rival Eli Lilly. A spokesperson for Eli Lilly said the company welcomed the FDA’s action.
Hims’ swift reversal marked a rare victory in Novo Nordisk’s battle against copycat compounded versions of its GLP-1 drugs. Hims did not respond to queries about whether it would continue selling compounded semaglutide injections on its website.
Pricing Pressure Continues Despite Victory
Novo’s shares had already rebounded over 5% Friday after the FDA signaled its crackdown. The stock remains under pressure from intense competition in the rapidly shifting GLP-1 market.
Novo Nordisk’s market value has dropped nearly two-thirds since peaking in June 2024. The stock is down nearly 50% over the past year.
More recently, shares sank 17% in a single day last week after the company flagged “unprecedented price pressure” at its full-year earnings. Novo shocked investors by forecasting both revenue and earnings could decline by as much as 13% in 2026.
The outlook breaks a run of double-digit growth. U.S. President Donald Trump’s push to lower drug prices has intensified competition in the high-margin obesity market.
Eli Lilly has pulled ahead in U.S. prescription trends and projected 2026 profit above Wall Street expectations earlier this week. Lilly’s oral GLP-1 pill orforglipron is expected to launch in April, which will intensify competitive pressure.
Compounding pharmacies continue to offer injectable versions of semaglutide. In the key U.S. market, obesity drugs made by Novo Nordisk and Lilly are driving a shift to a consumer-focused market.
Drugmakers are increasingly looking to cash-pay channels and telehealth to reach tens of millions of Americans. Hims, Novo Nordisk, and Eli Lilly all ran advertisements during Sunday’s Super Bowl promoting their weight-loss treatments.
Novo Nordisk stock remains down roughly 2% since the start of the year. Barclays analyst James Gordon noted in a report that Hims’ plans to launch compounded oral Wegovy at only $49 per month had raised initial concerns.
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