Hims & Hers (HIMS) shares fell 27% on Monday after the U.S. Food and Drug Administration announced on Friday that the agency plans to take “decisive action” to crack down on the sale of compound GLP-1, such as the product sold by the company.
The company also faces a lawsuit filed on Monday by Novo Nordisk (NVO), the maker of Ozempic, seeking to ban Hims & Hers from selling a compounded version of its weight-loss drug.
The FDA announced in a statement on Friday that it “intends to take decisive action to restrict GLP-1 active pharmaceutical ingredients (APIs) used in non-FDA-approved compounded drugs that are being marketed on a large scale by companies, including Hims & Hers and other compounding pharmacies, as similar substitutes for FDA-approved drugs.”
Popular GLP-1 drugs include products on the market such as Novo Nordisk’s Ozempic and Eli Lilly’s (LLY) Mounjaro.
The stock ended the day down just over 16%.
Hims & Hers sells cheaper versions of these drugs directly to consumers in “combined” form, which are slightly different than the FDA-approved versions but contain the same active ingredients. In a statement, Hims & Hers called Novo’s lawsuit the latest example of “Big Pharma… weaponizing the U.S. justice system to limit consumer choice.”
The FDA also said in Friday’s statement that “Following a warning letter issued in the fall of 2025, it is taking steps to combat misleading direct-to-consumer advertising and marketing.”
The statement added: “In promotional materials, companies cannot claim that non-FDA-approved combination products are generic or identical to FDA-approved drugs. They also cannot claim that the combination drug uses the same active ingredients as the FDA-approved drug or that the combination drug has been clinically proven to work in patients.”
With Monday’s decline, Hims & Hers shares have fallen about 50% this year. In late February 2025, the stock closed at a high of $68 per share. The stock was trading below $17 on Monday morning.
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