Hims & Hers (HIMS) Stock Crashes as Company Pulls Plug on Wegovy Copy

TLDR

• Hims & Hers pulled its $49 compounded Wegovy copycat pill just two days after launch following regulatory pressure and Department of Justice referral
• HIMS stock dropped 16% in after-hours trading while Novo Nordisk shares jumped over 10% on the news
• FDA Commissioner warned of “swift action” against companies mass-marketing illegal copycat drugs claiming similarity to approved products
• Department of Health and Human Services referred Hims to DOJ for potential violations of Federal Food, Drug, and Cosmetic Act
• The compounded pill was not FDA-reviewed or approved for safety or effectiveness unlike Novo’s Wegovy

Hims & Hers Health pulled its compounded weight-loss pill on Saturday. The company launched the Wegovy copycat just two days earlier. Federal regulators increased pressure on the telehealth firm immediately after the Thursday announcement.

Hims & Hers Health, Inc., HIMS

The company offered the pill at $49 per month. Novo Nordisk’s Wegovy costs $149 monthly. The price difference caught attention fast.

Mike Stuart from the Department of Health and Human Services wrote on X Friday afternoon that his agency referred Hims to the Department of Justice. The referral involves potential violations of the Federal Food, Drug, and Cosmetic Act. It also covers applicable Title 18 provisions for federal crimes.

HIMS stock fell 16% in after-hours trading Friday. Novo Nordisk shares rallied more than 10% during the regular session. The Danish drugmaker’s stock jumped another 4.2% after hours.

The Regulatory Crackdown

U.S. law permits compounded drugs under limited circumstances. But regulators warned that misleading advertising creates problems. Companies can’t imply their products have similar effects to FDA-approved drugs.

The Hims product never received FDA review or approval. Wegovy went through the full approval process. That distinction matters to regulators.

Company Response and Market Impact

This marks the first time Hims withdrew a copycat product after a competitor complained. Telehealth firms have sold lower-cost versions of GLP-1 weight-loss drugs for years. Drug shortages made compounding more common.

Supply shortages have now eased. Regulators appear more willing to limit the practice. Both Novo Nordisk and Eli Lilly have pushed the FDA to crack down on knockoff drugs.

Analysts maintain a Hold rating on HIMS with an average price target of $38.14. That implies 65.68% upside from current levels. The regulatory setback complicates the company’s expansion into the weight-loss market.

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