“It definitely came as a surprise”: How the Novo Nordisk-Hims & Hers partnership epically flopped in just two months

When Hims & Hers and Novo Nordisk announced they would partner to expand access to the drugmaker’s wildly popular weight-loss shot, it was an unexpected deal between parties that are typically seen as enemies. A new-generation telehealth company and a legacy drugmaker had finally put their differences aside and learned to work together.

Fifty-five days later, the partnership imploded.

Now company execs are taking verbal swings at each other, and Hims’ customers and employees have expressed confusion. “It definitely came as a surprise, no communication from Hims,” a person inside the company told Sherwood News after the deal blew up.

“I wonder how this is going to pan out. I’m going on month 3 of Wegovy now via Hims, prepaid for 6 months,” wrote a Reddit user in a Hims-related subreddit. “My concern is the $1200ish I’m out at present from the subscription if they are not able to fulfill it.” Another wrote, “I’m barely in my first month of the 6 month subscription. Are they going to refund us or what?”

Hims declined to comment for this article.

On Monday, Novo abruptly said it was calling off the deal with Hims and accused the company of “illegal mass compounding and deceptive marketing.” Hims CEO Andrew Dudum responded in a social media post: “In recent weeks, Novo Nordisk’s commercial team increasingly pressured us to control clinical standards and steer patients to Wegovy regardless of whether it was clinically best for patients.”

In an interview, Novo exec Dave Moore told Bloomberg that Hims blatantly violated their agreement by continuing to mass compound semaglutide (the scientific name for Wegovy). Dudum painted the move as a desperate play for the drugmaker to spark sales growth.

Though it remains unclear exactly what the terms of the partnership were, a benefit for Novo was access to Hims’ customers, many of them uninsured and otherwise unreachable. But the lower margins on selling branded drugs was a hard pill for Hims to swallow.

For Hims and its investors, the partnership was a sign that Novo and its army of lawyers, who had been suing smaller wellness clinics on allegations of selling compounded semaglutide, were no longer a material risk to Hims, and that potential collaborations with the drugmaker could bolster the company’s growth vision.

Hims stock surged 23% the day the pact was announced. When Novo ended the deal, traders dealt the company its worst stock market decline ever — down 35% — in response.

Even after the deal was announced, Hims had continued to sell compounded semaglutide, which it has consistently said is independently prescribed by providers and is for patients who don’t thrive on doses manufactured by Novo.

Novo has partnerships with telehealth companies Ro and LifeMD; neither responded to requests for comment. Novo declined to answer questions about its assessment of Hims as a partner. When asked if its other partner telehealth platforms had stopped compounding, a spokesperson for the drugmaker simply said that “the announcement only refers to Hims.”

Ro, for one, also has a partnership with Eli Lilly, which makes Zepbound, a competitor to Novo’s Wegovy. Lilly recently said that as part of its agreement with telehealth companies, they had to stop compounding both tirzepatide, the scientific name for Zepbound, as well as semaglutide.

Ro, which declined to comment on its partnerships, still offered compounded options earlier this month. So did Noom, which also has a partnership with Lilly.

Novo’s GLP-1 problem

Novo and Lilly have never hid the fact that they wished telehealth providers didn’t compound their patented drugs. But Novo, whose stock is down roughly 22% this year, finds itself in a particularly desperate situation.

While it was first to the GLP-1 race, it’s quickly losing ground to Lilly, whose drugs have shown to be more effective. The company ousted its CEO last month over the declining stock. Notably, Kåre Schultz — a former Novo executive who now serves on Hims’ board of directors — is seen as a potential replacement, according to Bloomberg.

Lilly and others have also shown more promising results in their search for a next-generation weight-loss drug. On Monday, Novo fell about 5%, likely not because it called off its Hims partnership but because it also reported lackluster results from its Wegovy successor shot, CagriSema.

Novo’s patent on semaglutide is set to expire in Canada next year. Generic drugmaker Sandoz International already announced plans to make copies of Wegovy and Ozempic.

Where does Hims go from here?

Analysts at Citibank said in a note that Hims is unlikely to see a material impact on its business with the end of the partnership, which is somewhat remarkable considering the stock drop it caused. The nature of the partnership — which simply allowed Hims users to access Wegovy from Novo’s direct-to-consumer pharmacy — didn’t leave much room for margin but did give Hims the benefit of being able to promote an FDA-approved drug.

The analysts at Citi estimate that Hims was making $600 for every six-month supply of Wegovy it sold compared to the $1,494 it makes on a compounded prescription.

“Still, this does portend an increasingly aggressive posture from Novo, following closely in the footsteps of LLY to take on virtual health companies that are still compounding semaglutide under the personalization exemption (referred to as ‘mass personalization’),” they said.

But the breakup also hit Hims’ vision of its long-term trajectory. In the spring, Dudum told Sherwood the company was in “a position to both partner and eventually bring to market world-class treatments.”

When its partnership with Novo was announced, Novo’s Moore said in a statement that it was working with Hims on “developing a road map that combines Novo Nordisk’s innovative medications with Hims & Hers’ ability to deliver access to quality care at scale.” That was not included in the announcements for the partnerships with Ro and LifeMD the same day.

“When the partnership was first announced, it seemed to indicate Novo would be collaborating with HIMS on future indications,” the Citi analysts said. “Unless HIMS changes its compounded semaglutide prescribing practices, this is exceedingly unlikely now, in our view.”