By Maggie Fick and Bhanvi Satija
LONDON, Feb 6 (Reuters) – Hims & Hers’ gambit to sell a $49 compounded version of Novo Nordisk’s Wegovy pill is rattling obesity shares, sparking debate about the legality of the move and threatening drugmaker returns in the burgeoning U.S. cash-pay market.
Compounding, already a drag on sales of Novo’s injectable obesity drug, involves pharmacies directly mixing the active ingredients of a medicine via a channel meant to address shortages or specific patient needs. It sits in a regulatory grey zone that’s frustrated big pharma.
Online telehealth firm Hims launched its pill on Thursday, as first reported by Reuters. With a price tag some $100 below that of Novo’s pill launched just last month, it offers to open up access to millions of Americans who cannot afford the brand-name product.
Analysts and investors said that Hims’ move cast a new shadow over an increasingly competitive obesity market that is facing major downward pricing pressure, especially as firms like Novo sell more drugs directly to consumers.
Novo had already surprised investors on Tuesday with its prediction of a sales and profit drop as deep as 13% this year, sparking a nearly 20% share plunge, which the Hims news only extended. Peer Eli Lilly, which is readying its own pill, also saw its shares slump.
“Until this issue is resolved, it adds another level of uncertainty to the obesity investment story,” said Markus Manns, a portfolio manager at Union Investment that holds Novo and Lilly shares, adding the launch of the Hims pill “questions the value of patents for consumer-oriented drugs”.
“It is not clear if and how long it will take Novo to stop them and if the FDA is willing to step in.”
Michael Nedelcovych, TD Cowen analyst, said Novo’s already gloomy forecast should be low enough to include the potential hit from Hims, although there was “a lot of uncertainty”.
Novo said it would take legal action to defend its interests. The U.S. Food and Drug Administration also threatened to take action against “illegal copycat drugs”, hammering Hims’ shares and offering Novo’s stock some respite on Friday.
Hims did not respond to requests for comment on Friday about industry criticism and the FDA’s comments.
HIMS PILL LAUNCH TESTS ‘LEGAL RED LINE’
Analysts and investors said that it was also not immediately clear if Hims could mass manufacture the pill or whether its version would actually work.
“They’re (Hims) just trying to prove a point … that everybody deserves low-cost access to weight loss drugs,” said Kevin Gade, portfolio manager at Bahl & Gaynor, which holds Lilly shares. “It’s definitely eyes wide open here.”
Hims said in a statement on Thursday that its compounded pill does not sacrifice quality and uses a “liposomal technology” that aids efficacy, without providing details.
Morningstar analyst Karen Andersen said that Novo’s patented technology, known as “SNAC”, is what allows its branded Wegovy pill to be properly absorbed into the body.
“Either this compounded version lacks SNAC and will not be effective, or includes it and is pressing what eventually has to be a legal red line,” said Andersen. “Either the laws protecting branded drugs aren’t clear enough, or they aren’t being enforced – or both.”
PILL DOUBTS COME AT TOUGH TIME FOR NOVO
BMO analyst Evan Seigerman said oral peptide drugs such as those made with semaglutide, the active ingredient in Wegovy, were inherently hard to replicate because the body is designed to break them down in the gut before they reach the bloodstream.
“If patients are not seeing the same weight loss, they’re unlikely to stay on therapy,” he told Reuters.
In the short term, however, analysts said Hims had shifted the focus off Novo’s Wegovy pill launch which had helped drive a share rebound in January after a tough 2025 hit by profit warnings, sliding shares, management turmoil and job cuts.
Lilly gave a far stronger 2026 outlook, but also slid on the Hims’ launch.
“The timing after Novo and Lilly just gave earnings and outlooks isn’t ideal, and gives the market yet another thing to worry about,” said Bernstein analyst Christian Moore.
(Reporting by Maggie Fick and Bhanvi Satija; Editing by Adam Jourdan and Kirsten Donovan)
