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MarketsJun 23, 2025

Telehealth Giant Hims & Hers Stock Crashes 34% as Novo Nordisk Cuts Ties Over Wegovy Knockoff Controversy

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When your business partner accuses you of selling copycat versions of their blockbuster drugs, you know the friendship partnership’s over. Yesterday, Hims & Hers stock nosedived 34% after Novo Nordisk terminated their collaboration, stating the company violated laws by mass-selling cheaper compounded alternatives of weight loss drug Wegovy under the “false guise” of personalization.

Novo’s investigation revealed that’ Wegovy copycats used ingredients from uninspected Chinese suppliers that were never inspected by the FDA or flagged for quality violations.
This partnership collapse also overshadows Hims’ anticipated promotion from the Russell 2000 to the Russell 1000, putting one of the market’s fastest-growing stocks on ice — up 67% this year.

Plot twist brewing: Citi analyst Daniel Grosslight warned the breakup raises Hims & Hers’ legal risk “substantially,” expressing surprise that the original deal didn’t include efforts to curb compounding practices. But it’s also bad for Novo, which was banking on Hims’ distribution to catch up with rival Eli Lilly. Already dominating the weight loss biz, the firm is set to extend its lead by launching its first oral GLP-1 pill after successful trials showed participants lost an average of 16 pounds and achieved A1C reductions of up to 1.6% in diabetic patients. With Novo’s shares tumbling 6% on the news, the pressure is now on to find a new edge before rivals strengthen their hold on this lucrative market.