March 9 (Reuters) – Hims & Hers’ shares were up over 40% on Monday, after Novo Nordisk agreed to sell its blockbuster Wegovy and Ozempic drugs through the telehealth firm’s platform, signaling an end to the dispute between the two companies.
The deal lands roughly a month after Novo filed a patent‑infringement lawsuit against Hims, following the U.S. telehealth firm’s launch, and then cancellation, of a $49 copy of Novo’s obesity pill.
Analysts said the development was clearly positive for Hims, which was otherwise facing the prospect of a prolonged and costly legal battle.
“We believe that Novo’s case against HIMS was strong, and this announcement also reduces risk related to potential FDA and DOJ enforcement actions against HIMS,” BTIG analyst David Larsen wrote in a note.
Hims shares were up 41.1% at $22.2 midday, while U.S.-listed shares of Novo were up 2.8%.
For Novo, this deal is a significant step forward in dealing with a major commercial headwind, according to BMO Capital Markets analyst Evan David Seigerman.
Novo is grappling with telehealth firms offering cheaper compounded copycat versions of its obesity treatments.
“While the announcement does not solve all the commercial woes that led to a below consensus revenue guide, one major issue has been resolved,” Seigerman wrote in a note.
The financial impact for Hims, however, remains uncertain.
Under the agreement, Hims will offer regulatory-approved Ozempic and Wegovy injectables, as well as the Wegovy pill, to U.S. consumers on its platform at Novo’s self-pay prices.
In return, Hims will no longer advertise compounded GLP-1 drugs, though it will continue offering them when providers deem it clinically necessary.
Analysts said although selling Novo’s branded products would bring a higher revenue contribution, it will likely generate lower margins for Hims than its compounded offerings.
(Reporting by Mrinalika Roy in Bengaluru; Editing by Krishna Chandra Eluri)
Comments