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Investing.com -- Shares of Hims Hers Health Inc (NYSE:HIMS) fell more than 3% early Tuesday before paring losses to around 0.2% in afternoon trade, after rising legal risks and a data disclosure drove swings in investor sentiment. The initial drop followed statements from Novo Nordisk (NYSE:NVO) indicating that the company is exploring litigation and other measures to curb the use of compounded GLP-1 medications, including semaglutide products sold by platforms like Hims.
On Tuesday, Novo stock fell over 20% as the drugmaker lowered its full-year sales forecast, citing weaker-than-expected performance for its weight-loss drugs Wegovy and Ozempic, particularly in the U.S. market. The company attributed part of the softness to “the persistent use of compounded GLP-1s,” which it said continues despite the expiration of a federal grace period, and described some compounding practices as potentially unlawful and unsafe.
"Novo Nordisk is pursuing multiple strategies, including litigation, to protect patients from knockoff ‘semaglutide’ drugs," the pharma giant said, stoking investor fears of a Novo v Hims lawsuit.
Hims & Hers, which markets compounded versions of semaglutide through its telehealth platform, released clinical data shortly after Novo’s statement. The data showed that users of its compounded GLP-1 treatments lost an average of 10.3% of body weight over six months, with relatively low dropout and side-effect rates.
The results reflect Hims’ broader strategy of offering personalized weight-loss programs through digital access to physicians and 503B compounding pharmacies. These facilities are permitted under FDA regulations to produce compounded drugs if certain conditions are met, such as when a medication is in shortage or tailored to specific patient needs.
Novo, for its part, has taken a more aggressive stance against compounding in recent months. In May, the Danish drugmaker terminated its short-lived partnership with Hims and publicly accused the company of “disseminating deceptive marketing that put patient safety at risk.”
Hims & Hers CEO Andrew Dudum responded at the time by suggesting Novo aimed to strong-arm the company to "steer patients to Wegovy," framing the termination as anticompetitive and further reaffirming Hims & Hers’ personalized compounding strategy.
While Hims’ latest data appeared to ease some investor concerns, the evolving regulatory and legal landscape continues to cast uncertainty over compounded GLP-1 providers. Market reactions reflected both the potential of digital-first weight loss solutions and the growing pressure from established pharmaceutical players.