Key Takeaways
- Shares of Hims & Hers (HIMS) exploded more than 44% during premarket hours Monday following a Bloomberg report about a Novo Nordisk partnership
- An official partnership announcement between the companies could arrive as soon as Monday
- This collaboration represents a dramatic turnaround after Novo initiated legal action against Hims in February regarding a generic oral Wegovy product
- Leerink’s Michael Cherny described the news 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) exploded over 44% during Monday’s premarket session following a Bloomberg report indicating Novo Nordisk intends to distribute its weight-loss medications via the Hims platform.
According to the report, a formal announcement regarding this partnership may be released as soon as Monday. The revelation triggered a massive rally in HIMS shares, while Novo’s Copenhagen-traded stock gained approximately 1%.
Hims & Hers Health, Inc., HIMS
This represents a dramatic reversal of fortune for a stock that had plummeted roughly 51% year-to-date prior to Monday’s surge.
Under the arrangement, Novo’s obesity medications — including products associated with its Ozempic and Wegovy franchises — would become available directly through the Hims platform. This marks a significant pivot considering the contentious relationship between these two companies in recent months.
Novo filed a lawsuit against Hims back in February after the telehealth provider introduced a generic alternative to Novo’s oral Wegovy weight-loss medication. The pharmaceutical giant claimed the offering violated patents protecting its bestselling drugs.
This legal action represented the most recent confrontation between the companies. Previously, Novo had criticized Hims for allegedly continuing to promote compounded alternatives of its medications despite earlier disagreements.
Wall Street Weighs In
Michael Cherny, an analyst at Leerink, characterized this development as “both a surprise and an unabashed positive for HIMS’ stock.” He noted the agreement might circumvent what appeared to be “a protracted legal process that could include a full trial.”
However, Cherny remained cautious about upgrading his outlook. “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 a comparable perspective. He indicated the collaboration might alleviate a major concern surrounding HIMS — the regulatory and legal uncertainties connected to 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 like Hims gained the ability to market budget-friendly compounded alternatives of Novo and Eli Lilly weight-loss medications during a time when branded drug supplies were constrained.
These supply constraints have since been resolved. Regulatory authorities anticipated compounding activities would cease, but certain telehealth firms continued operations by modifying dosages or formulations in an attempt to distinguish their offerings from branded options.
This strategy is what placed Hims squarely in Novo’s legal sights earlier this year.
The reported partnership, once officially confirmed, would fundamentally transform this dynamic — converting Hims from a rival into an authorized distribution channel for Novo’s pharmaceutical products.
Novo’s Copenhagen-traded shares were trading approximately 1% higher on the announcement during early Monday trading.
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