Hims Stock Plunges After Novo Nordisk Ends Partnership Over “Misleading Marketing” Allegations

Hims & Hers Health ($HIMS), one of the hottest U.S. telehealth stocks this year, just got hit with a massive reality check.

On Monday, Novo Nordisk ($NVO), the Danish pharma giant behind the blockbuster GLP-1 drug Wegovy, officially terminated its partnership with Hims—just months after expanding it. The news sent HIMS stock tumbling over 34%, erasing much of its recent rally.

What happened?

Novo Nordisk accused Hims of engaging in deceptive marketing practices and allegedly selling compounded (i.e., non-FDA approved) versions of semaglutide—Wegovy’s active ingredient—while promoting it as “personalized care.” Novo also flagged safety concerns, suggesting these medications may have been sourced from unauthorized international suppliers, sidestepping proper medical standards.

The now-terminated partnership, run through Novo’s NovoCare pharmacy, aimed to make FDA-approved weight-loss medications more affordable and accessible to U.S. patients. But with Hims allegedly cutting regulatory corners, Novo clearly didn’t want to risk the reputational fallout.

Why this matters

For Novo, this is partly about PR and compliance. GLP-1 drugs are under intense scrutiny due to off-label use and ongoing supply issues. Any hint of misuse could jeopardize regulatory trust and brand value.

Novo’s stock slipped 5.5%, not only because of the Hims controversy, but because its Phase 3 data for CagriSema didn’t live up to the hype.

For Hims, though, the damage runs deeper.

GLP-1s had become a major growth lever. While Hims originally built its name on ED and hair loss treatments, the addition of Wegovy and Ozempic opened a potentially massive new revenue stream—analysts estimate GLP-1s could eventually contribute up to 30% of total sales.

The partnership with Novo lent Hims legitimacy in the prescription drug space. Losing that tie—especially under accusations of regulatory violations—raises serious concerns about Hims' compliance maturity and operational discipline. To make matters worse, the stock was trading near a 52-week high just days before the news broke.

Is this a death blow?

Not necessarily. Let’s zoom out.

Despite the current storm, Hims remains a profitable, fast-growing DTC telehealth company. In Q1 2025, it reported $586 million in revenue (up 100% YoY), $49.5 million in net income, and a growing base of 2.4 million active subscribers.

Its core model—subscription-based, low-cost telehealth—remains intact. And with its recent acquisition of European digital health provider ZAVA, Hims is expanding fast into markets like the UK, Germany, France, and Ireland, adding millions of new consultations annually.

So while this GLP-1 controversy may sting in the short term, Hims’ long-term strategy is much broader: creating a full-stack telehealth ecosystem focused on “sub-health” conditions like anxiety, obesity, and skin issues.

What’s next?

To bounce back, Hims will need to tighten up its compliance procedures, especially around sourcing and prescribing high-risk drugs like GLP-1s. The stock had already been priced for perfection—trading at a lofty 90x price-to-sales—so the market is now reassessing the risk side of the story.

If management can rebuild trust and steer the company back toward responsible, transparent growth, Hims still has a shot at becoming a dominant player in the $10 trillion global healthcare market.

But this episode serves as a powerful reminder: in healthcare, innovation and convenience can’t come at the cost of regulatory compliance. Cut corners, and it doesn’t take long for the consequences to catch up.