Shares in Denmark's pharmaceutical giant Novo Nordisk (NVO -4.81%) were lower by 4% as of 11 a.m. ET today. The move comes as the fallout from the sudden termination of its partnership with telehealth company Hims & Hers continues to escalate.
What happened
On Monday, Novo Nordisk terminated the partnership, claiming Hims & Hers "failed to adhere to the law which prohibits mass sales of compounded drugs under the false guise of 'personalization'" and is "disseminating deceptive marketing."
It's a strong statement to make, and Hims & Hers management, led by CEO Andrew Dudum, isn't wasting any time in responding.
The argument centers around Novo Nordisk's weight loss drug, Wegovy. Novo Nordisk believes it had an agreement with Hims & Hers to stop the mass sales of compounded, copycat versions of Wegovy, but the latter failed to comply.
In response, Dudum gave an interview with Bloomberg and argued that Novo Nordisk had been pushing his company to guide patients toward Wegovy.
"They've been losing a tremendous amount of market share, there's been a huge amount of turmoil with management, and I think they're just under real financial strain to try to drive sales," Dudum said.
If Dudum's remarks were intended to hurt the stock price, then they arguably did their job today.
Image source: Getty Images.
What's next for Novo Nordisk?
The breakup of the relationship with Hims & Hers and subsequent remarks highlight the threat from competitors to Wegovy, like Eli Lilly's Zepbound. Still, Wegovy sales are growing at a whopping rate (up 85% in the first quarter on a reported basis), and there's enough growth in the market for everyone.
