Hims & Hers Health (HIMS +1.89%) stock crashed 25% through 10:45 a.m. ET Monday morning after an eventful weekend.
On Thursday, the telehealth company announced it would begin selling a compounded version of Wegovy in pill form, for $49 per month. Hims & Hers doesn't manufacture "Wegovy." Novo Nordisk (NVO +1.39%) does, charging $149 per month for Wegovy (Ozempic) in pill form, and $199 injectable.
Novo wasn't at happy about this, and said it planned to sue Friday. That same day, the U.S. Food and Drug Administration said it would also crack down on Hims & Hers, potentially cutting off access to ingredients the company needs to manufacture Ozempic copycats or seizing Hims & Hers products.
By Saturday, Hims agreed it will not sell its Ozempic lookalike pill after all.
Image source: Getty Images.
Hims & Hers surrenders. Novo refuses to accept.
So what happened here? Hims & Hers gambled the FDA would allow it to get away with copying Novo Nordisk's GLP-1 weight loss drug, riding Novo's advertising coattails -- and undercutting Novo on price. If it gambled and won, this would have been a tremendous victory for Hims.
Instead, it gambled and lost.
It now seems clear Hims will not fight the combined forces of the FDA and Novo's lawyers. Unfortunately for Hims, it may not have a choice -- because this morning, Novo sued Hims & Hers, requesting a permanent ban not only on Hims' Ozempic pill, but on any compounded versions of its drugs.
NYSE: HIMS
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What this means for Hims & Hers stock
Novo's lawsuit demands the court enforce its "'343 Patent" on "semaglutide and the pharmaceutical products containing it." If it wins the lawsuit, Hims & Hers won't be allowed to compound any kind of GLP-1 weight loss drugs using semaglutide.
Hims may have just loss its GLP-1 business.
