Key Takeaways
- Hims & Hers (HIMS) shares exploded more than 44% during premarket hours Monday following a Bloomberg report that Novo Nordisk will distribute weight-loss medications through its telehealth platform
- An official partnership announcement between the companies could arrive as soon as Monday
- This agreement represents a complete about-face following Novo’s lawsuit against Hims in February concerning a generic version of its oral Wegovy medication
- Leerink’s Michael Cherny described the development as “both a surprise and an unabashed positive for HIMS’ stock” while maintaining his Market Perform rating
- Morgan Stanley analyst Craig Hettenbach suggested the partnership might reduce legal and regulatory concerns that have pressured the heavily shorted shares
Shares of Hims & Hers Health (HIMS) skyrocketed over 44% during premarket trading Monday following Bloomberg’s report that Novo Nordisk intends to distribute its weight-loss medications via the Hims telehealth platform.
According to the report, a formal partnership announcement may be revealed as early as Monday. The disclosure propelled HIMS shares significantly higher, while Novo’s Copenhagen-traded stock gained approximately 1%.
Hims & Hers Health, Inc., HIMS
The rally represents a dramatic reversal for shares that had already plummeted roughly 51% year-to-date prior to Monday’s premarket session.
Under the arrangement, Novo’s obesity medications — including products associated with its Ozempic and Wegovy brands — would become available directly through the Hims platform. This represents a remarkable transformation considering the recent animosity between these two corporations.
Novo initiated legal action against Hims in February following the telehealth provider’s introduction of a generic alternative to Novo’s oral Wegovy weight-loss medication. Novo contended the offering violated patents protecting its bestselling drugs.
That lawsuit represented merely the most recent confrontation between the parties. Novo had previously challenged Hims for allegedly continuing to promote compounded alternatives to its medications even after their initial relationship soured.
Wall Street Weighs In
Michael Cherny, an analyst at Leerink, characterized the news as “both a surprise and an unabashed positive for HIMS’ stock.” He noted the agreement may circumvent what appeared destined to become “a protracted legal process that could include a full trial.”
However, Cherny remained cautious about turning fully optimistic. “Even with this positive news, we do not see this as a clearing event for HIMS to fully recapture its growth potential,” he stated, maintaining his Market Perform rating.
Craig Hettenbach from Morgan Stanley echoed similar sentiments. He indicated the collaboration could alleviate one of HIMS’s most significant concerns — the regulatory and legal uncertainties surrounding its weight-loss offerings.
Hettenbach noted that “any reduction in those risks could lead to a strong reband in the heavily shorted stock.”
The Compounded Drug Controversy
Telehealth providers such as Hims gained the ability to market cheaper compounded alternatives to Novo and Eli Lilly weight-loss treatments during a time when branded product availability was constrained.
These supply shortages have since been resolved. Regulatory authorities anticipated compounding activities would cease, yet certain telehealth platforms continued operations by modifying dosages or formulations to distinguish their offerings from branded alternatives.
This strategy ultimately placed Hims in Novo’s legal sights earlier this year.
The emerging partnership, pending confirmation, would fundamentally transform this dynamic — converting Hims from a direct competitor into an authorized distribution channel for Novo’s pharmaceutical products.
Novo’s Copenhagen-listed shares traded approximately 1% higher on the announcement during early Monday trading.
