Novo Nordisk has withdrawn its patent infringement lawsuit against the telehealth service Hims & Hers after the two companies reached an agreement for Hims to distribute Novo’s branded medications through its platform.
On Monday, Novo Nordisk CEO Mike Doustdar informed CNBC’s Charlotte Reed, “We have opted to cease the current court proceedings and, naturally, we retain the right to restart them if necessary, though I do not foresee that occurring.”
The companies declared in statements on Monday that, under the terms of the agreement, Hims will provide access to both injectable and oral semaglutide, marketed as Ozempic and Wegovy, at pricing consistent with other telehealth platforms. Furthermore, Hims will discontinue advertising compounded GLP-1 drugs on its platform or in its marketing materials.
During morning trading, Hims’ stock price surged by over 40%, while Novo’s shares listed in Copenhagen saw a 2.1% increase. In contrast, the pan-European blue-chip index Stoxx 600 experienced a 1% decline, and the S&P 500 fell by 0.6%.
In February, Novo had announced its intention to sue Hims, accusing it of “mass illegal compounding.” This occurred after Hims revealed plans to sell a generic version of the Wegovy pill for $49, approximately $100 less than Novo’s branded pill sold through its direct-to-consumer platform, NovoCare.
Hims promptly withdrew the pill following strong objections from both Novo and the U.S. Food and Drug Administration. The FDA had pledged to implement “decisive steps” to restrict practices by compounding pharmacies and had referred Hims to the Department of Justice for potential violations of federal law.
FDA Commissioner Marty Makary expressed his approval that Hims will stop promoting unapproved compounded drugs and will instead sell FDA-approved products as a result of the deal with Novo.
“Importantly, they will keep them affordable (no increase in price) and limit compounded GLP-1s for rare (FDA compliant) cases,” Makary wrote in a post on X.
Hims had significantly profited from selling generic versions of the blockbuster weight-loss drug by exploiting a loophole in U.S. regulations that permits companies other than the patent holder to sell a medication if it is in short supply.
While semaglutide experienced a shortage in its initial stages, Novo has since alleviated these supply constraints by increasing manufacturing. Hims, however, continued to sell generic versions of the drugs, asserting that its copies were “personalized” and therefore legal.
The patent for semaglutide in the U.S. is protected until 2032.
Last year, Novo and Hims had collaborated to provide discounted weight loss injections to the telehealth company’s clientele. Novo terminated this partnership just two months later, alleging that Hims utilized “deceptive” marketing that jeopardized patient safety.
“This is a vastly different situation than our last collaboration,” Doustdar told CNBC.
He further elaborated, “Hims & Hers have consented that upon receiving our products, they will no longer advertise, promote, or market compounded products to the general public,” adding that Hims has now agreed to modify its business model to reserve the compounding versions “solely for those infrequent instances where they are genuinely required.”
Both Novo Nordisk ADRs and Hims shares have demonstrated considerable volatility.
Doustdar reported that Novo currently possesses over 600,000 prescriptions for the Wegovy pill.
Doustdar conceded that at the time of the Wegovy pill’s January launch, there were concerns, “somewhat instigated by our rival,” that specific dietary restrictions might impede the drug’s widespread acceptance.
“Well, I can tell you, this has proven absolutely untrue,” he asserted. “Individuals are genuinely keen because it is presently the most effective pill available on the market.”
In a statement, Hims announced that its existing patients utilizing compounded semaglutide “will be able to transition to FDA-approved medications when their healthcare providers deem it clinically suitable.”
Speaking with CNBC’s Brandon Gomez, Hims CEO Andrew Dudum highlighted the rapidly evolving landscape for anti-obesity medications.
He commented that “demand is set to keep growing with the upcoming range of products, which truly addresses requirements for affordability, personalization, and diverse formulations — aspects that were not available even as recently as six or twelve months ago.”
Dudum further mentioned that Hims is actively engaging in discussions with any entity capable of introducing novel therapies to its platform, “be it established biotechnology firms or major pharmaceutical corporations.”
Eli Lilly, the company behind Zepbound, is anticipated to introduce a competing weight-loss pill, orforglipron, during the second quarter, contingent on FDA approval.