On April 29, Novo Nordisk (NVO 1.46%) and Hims & Hers Health (HIMS 2.36%) announced they were collaborating to allow Hims & Hers to sell the weight-loss drug Wegovy. Hims & Hers stock soared on the news.

It wasn't a marriage made in heaven. Novo Nordisk revealed on Monday that it will no longer work with Hims & Hers, and that direct access to Wegovy won't be available via NovoCare Pharmacy to Hims & Hers members.

Here's what investors need to know about the implications of the termination of the short-lived deal between these two healthcare companies.

A photo of two hands in a handshake ripped in two.

Image source: Getty Images.

Why did Novo Nordisk end its collaboration with Hims & Hers?

Novo Nordisk issued an unusually blunt press release explaining its decision to stop working with Hims & Hers. The Swedish drugmaker stated:

Over one month into the collaboration, Hims & Hers Health, Inc. has failed to adhere to the law, which prohibits mass sales of compounded drugs under the false guise of 'personalization' and are disseminating deceptive marketing that put[s] patient safety at risk.

Dave Moore, executive vice president of Novo Nordisk's U.S. Operations, said, "Novo Nordisk is firm on our position and protecting patients living with obesity." He added, "When patients are prescribed semaglutide treatments by their licensed healthcare professional or a telehealth provider, they are entitled to receive authentic, FDA-approved and regulated Wegovy."

The two companies had clashed earlier this year after Hims & Hers ran a TV commercial during the Super Bowl that promoted compounded GLP-1 medications as a less-expensive alternative to Wegovy and other branded GLP-1 products. Novo Nordisk quickly fired back with an ad in The New York Times and USA Today that a spokesperson said was a "direct response" to Hims & Hers' commercial.

What was Hims & Hers' response to Novo Nordisk's allegations?

As of the market close on Monday, Hims & Hers had not issued an official press release about Novo Nordisk's allegations. However, Hims & Hers CEO Andrew Dudum posted on X (formerly Twitter) about his thoughts on the matter:

According to Dudum, Novo Nordisk "pressured" Hims & Hers to "steer patients to Wegovy, regardless of whether it was clinically best for patients." He declared, "We refuse to be strong-armed by any pharmaceutical company's anticompetitive demands that infringe on the independent decision-making of providers and limit patient choice."

How will this impact Hims & Hers?

Hims & Hers stock plunged nearly 35% on Monday following Novo Nordisk's announcement. This steep sell-off indicates how much the termination of the Wegovy deal could impact Hims & Hers.

In its first-quarter investor presentation, Hims & Hers listed achieving "long-term leadership position in weight loss" as its top priority. And the company put "integration of NovoCare" (a reference to offering Wegovy via Novo Nordisk's direct-access pharmacy platform) first among the ways it planned to be the long-term leader in the weight-loss market.

Dudum insisted in his social media post on Monday, "We will continue to offer access to a range of treatments, including Wegovy, to ensure providers can serve the individual needs of patients." However, Hims & Hers will only be able to sell a personalized compounded version of Wegovy when healthcare professionals believe that it is clinically necessary for a patient. This will severely limit Hims & Hers' ability to offer one of the most popular weight-loss drugs on the market.

How will this impact Novo Nordisk?

Novo Nordisk's share price fell as well on Monday. However, the big pharma stock tumbled only around 5%, reflecting a much more muted impact on its business from scrapping the deal with Hims & Hers.

Wegovy will still be available on some telehealth platforms. Moore stated, "We will work with telehealth companies to provide direct access to Wegovy that share our commitment to patient safety -- and when companies engage in illegal sham compounding that jeopardizes the health of Americans, we will continue to take action."

Hims & Hers isn't the only telehealth company that entered into a collaboration with Novo Nordisk in April. LifeMD also secured a similar deal that remains in place. Its shares were down roughly 3% on Monday.