23.06.2025 12:59
Hims & Hers Health (NYSE: HIMS) experienced a dramatic stock price decline, plummeting over 20% in pre-market trading on Monday. This sharp drop followed Novo Nordisk's (NYSE: NVO) announcement that it was terminating its partnership with Hims & Hers, citing concerns about the telehealth company's distribution of the weight-loss drug Wegovy. Shares closed Friday at $64.22, only to open Monday at $50.59, erasing recent gains and significantly impacting its year-to-date rally of 154%.
The selloff directly resulted from Novo Nordisk's decision to cut off Hims & Hers' access to Wegovy through its NovoCare Pharmacy. This action stemmed from allegations that Hims & Hers violated regulations concerning the mass sale of compounded medications and employed deceptive marketing tactics. Their collaborative venture, initiated in April, offered a bundled monthly subscription service including Wegovy, 24/7 care, and nutritional guidance for $599, a strategy now abruptly halted.
Adding to the concerns, Novo Nordisk expressed apprehension over Hims & Hers potentially sourcing semaglutide, Wegovy's active ingredient, from unauthorized manufacturers, including unapproved sources in China. Dave Moore, Executive Vice President of U.S. Operations at Novo Nordisk, emphasized the company's commitment to patient safety and the importance of providing only authentic, FDA-approved Wegovy. This statement underscored the gravity of the situation and the potential risks associated with Hims & Hers' practices.
Further exacerbating the situation for Hims & Hers, Bank of America maintained its 'Underperform' rating on HIMS stock, setting a price target of $28. Analyst Allen Lutz highlighted a significant deceleration in core revenue growth, dropping from approximately 45% in the third quarter of 2024 to 29% in the first quarter of 2025, despite the positive impact of longer-term subscriptions. This downward trend underscores the broader challenges facing Hims & Hers, independent of the Wegovy partnership termination. The combination of these factors paints a bleak picture for the company's immediate future.
