Shares of Hims & Hers Health Inc. (HIMS) plunged almost 30% in pre-market trading on Monday following the announcement that Danish pharmaceutical giant Novo Nordisk has terminated its collaboration with the telehealth company. The partnership, which began in April, was centered around the sale of Novo Nordisk's popular weight loss drug Wegovy through Hims & Hers' platform.
Novo Nordisk stated that direct access to Wegovy would no longer be available to Hims & Hers Health via the NovoCare Pharmacy. The abrupt end to this collaboration comes as a significant blow to Hims & Hers, which had positioned itself to capitalize on the growing demand for weight loss treatments. The partnership had allowed Hims & Hers to dispense all doses of Wegovy to eligible subscribers, potentially opening up a lucrative revenue stream.
The termination appears to stem from serious concerns raised by Novo Nordisk. The company cited "Hims & Hers deceptive promotion and selling of illegitimate, knockoff versions of Wegovy that put patient safety at risk" as the reason for ending the partnership. This accusation, if substantiated, could have far-reaching implications for Hims & Hers beyond the immediate stock price drop, potentially affecting its reputation and future business prospects in the competitive telehealth market.