Shares of Novo Nordisk (NVO -5.49%) are tumbling on Monday, down 5.6% as of 2:11 p.m. ET. The drop comes as the S&P 500 (^GSPC 0.96%) and the Nasdaq Composite (^IXIC 0.94%) both jumped 0.7%.
The Danish pharmaceutical giant's stock fell after it announced it was severing ties with Hims & Hers Health, as well as releasing experimental data for an obesity drug that failed to impress investors.
Hims & Hers can no longer sell weight-loss drugs
Novo Nordisk announced this morning that it is ending its partnership with Hims & Hers, which allowed the telehealth provider to sell Novo's blockbuster weight-loss drug, Wegovy.
The company said that Hims & Hers had "failed to adhere to the law, which prohibits mass sales of compounded drugs under the false guise of 'personalization,'" alleging that, among other things, Hims & Hers produced its version of the drug using Chinese suppliers never approved by the FDA.
Image source: Getty Images.
Novo's trial disappoints
Novo Nordisk presented trial results from its trials evaluating the efficacy of CagriSema, another weight-loss drug. Patients with chronic obesity lost an average of 22.7% of their body mass at 68 weeks. While that number is significant, it is less than the 25% the company has been aiming for, disappointing investors.
Despite the disappointment, I think the pharmaceutical company is still in a solid position to continue competing in the uber-lucrative weight loss drug market, although rival Eli Lilly looks to be in a better position at the moment.
