Nordisk has dropped its legal case against telehealth provider him and her for patent infringement, after the two companies agreed that Hims would sell the Novo-branded drugs through its platform.
“We have decided to abandon the current court proceedings and of course reserve the ability to resume them if necessary, but I don't foresee that happening,” Novo Nordisk CEO Mike Doustdar told CNBC's Charlotte Reed on Monday.
Under the agreement, Hims will offer access to injectable and oral semaglutide, sold as Ozempic and Wegovy, at the same price as other telehealth platforms, and Hims will no longer advertise GLP-1 compounded medications on its platform or in its marketing, the companies said in statements Monday.
Hims shares soared more than 40% in morning trading, while Copenhagen-listed Novo shares rose 2.1%. The top-line pan-European index Stoxx 600 was trading 1% less, while the S&P 500 fell 0.6%.
In February, Novo said it would sue Hims for what it called “massive illegal compounding” after the latter announced it would sell a copycat version of the Wegovy pill for $49, about $100 less than Novo sells the brand-name pill through its NovoCare direct-to-consumer platform.
Hims quickly recalled the pill after negative reaction from both Novo and the U.S. Food and Drug Administration. The FDA pledged to take “decisive action” to restrict the practices of compounding pharmacies and refer Hims to the Department of Justice for possible violations of federal law.
FDA Commissioner Marty Makary said he was glad to see Hims will stop advertising unapproved compounded drugs and instead sell FDA-approved products through the deal with Novo.
“Most importantly, they will keep them affordable (no price increase) and limit compounded GLP-1s to rare cases (FDA compliant),” Makary wrote in a post on X.
Hims has profited greatly from the sale of copycat versions of the blockbuster weight-loss drug through a loophole in U.S. regulations that allows companies other than the patent holder to sell a drug if there is a shortage.
While there were shortages of semaglutide in the drug's early days, Novo has since resolved supply constraints as it ramped up manufacturing. Hims, however, continued to sell knockoff versions of the drugs, arguing that its copies are “customized” and therefore legal.
The semaglutide patent is protected in the United States until 2032.
Last year, Novo and Hims partnered to offer discounted weight loss injections to the telehealth company's clients. Novo ended the collaboration just two months later, saying Hims used “misleading” marketing that put patient safety at risk.
“It's a very different situation than the last time we did this,” Doustdar told CNBC.
“Hims & Hers have agreed that upon receipt of our products, they will no longer advertise, promote or market compounded products to the masses,” he said, adding that Hims has now agreed to change its business model to reserve compounded versions “for only those rare cases where they are necessary.”
Novo Nordisk ADRs and Hims shares have been volatile.
Novo now has more than 600,000 prescriptions for Wegovy pills, Doustdar said.
Doustdar acknowledged that at the time of the Wegovy pill's launch in January, there were concerns, “somewhat fueled by our competitor,” that certain dietary restrictions could limit absorption of the pill.
“Well, I have news for you, this has not been the case at all,” he said. “People are really interested because it is the most effective pill currently on the market.”
Current Hims patients taking compounded semaglutide “will have the opportunity to transition to FDA-approved medications when their providers determine it is clinically appropriate,” Hims said in a statement.
Speaking to CNBC's Brandon Gomez, Hims CEO Andrew Dudum highlighted the rapidly changing landscape of anti-obesity drugs.
“Demand will continue to accelerate with the new lineup that's coming out, and the lineup really meets affordability, customization and form factor needs that historically, even just six months ago and 12 months ago, didn't exist,” he said.
Hims is also in talks with anyone who can bring new therapies to the platform, he added, “whether existing biotechs or existing large pharmaceutical companies.”
zepbound maker Eli Lilly It is expected to launch a rival weight-loss pill called orforglipron in the second quarter, pending FDA approval.
