Hims & Hers Health Inc. (NYSE: HIMS) made headlines in June 2025 after pharmaceutical partner Novo Nordisk abruptly terminated its agreement with the company. The partnership focused on the distribution of Wegovy, a weight-loss drug powered by semaglutide, but was cut short due to alleged regulatory concerns and misleading marketing tactics.
The news caused Hims stock to plunge nearly 30%, triggering investor concerns and raising questions about the company’s future in the competitive digital health space.
⚠️ Why Did HIMS Stock Drop?
On June 23, 2025, Novo Nordisk publicly announced the end of its collaboration with Hims & Hers. The decision was based on accusations that Hims was:
- Illegally compounding semaglutide
- Marketing the treatment under unauthorized or misleading brand names
- Ignoring FDA restrictions, now that semaglutide is no longer on the drug shortage list
Within hours, HIMS shares dropped from over $11 to around $7.90—marking one of the steepest declines in its trading history.
🧪 What Is Compounded Semaglutide?
Semaglutide is the main ingredient in Wegovy and Ozempic, both widely used for weight loss and diabetes treatment. When the FDA listed semaglutide as a shortage drug, pharmacies were temporarily allowed to compound their own versions.
However, that status changed in mid-2025, and the continued use of compounded versions became a violation unless specific criteria were met. Novo Nordisk alleged that Hims continued selling semaglutide-based weight-loss treatments despite those changes.
📊 Financial Snapshot Before the Crash
Before the partnership fallout, Hims was on a strong upward trajectory:
| Metric | Q1 2025 Results |
|---|---|
| Revenue | $586 million (+111% YoY) |
| Net Income | $49.5 million |
| Subscribers | 1.7 million |
| Gross Margin | Over 75% |
The company had also recently expanded to Europe through its acquisition of ZAVA, a UK-based telehealth platform.
🔄 How Is Hims Responding?
Despite the setback, Hims remains committed to its weight-loss business model. The company has announced that:
- It will continue to offer non-semaglutide alternatives like liraglutide and Zepbound
- It plans to launch a new personalized weight-loss program priced at $165/month
- Its other verticals in mental health, hair loss, and sexual wellness remain unaffected
Additionally, Hims maintains that all current compounded medications are state-compliant and safe.
📉 Should Investors Worry?
There’s a lot of uncertainty. While Hims is not under direct FDA investigation as of this writing, the regulatory scrutiny could intensify. Investor sentiment has taken a hit, but long-term bulls argue the brand’s subscriber-first business model and diversified offerings may help it bounce back.
Here’s a breakdown of the pros and cons:
✅ Strengths:
- High-growth sectors: wellness, telehealth, mental health
- Strong brand recognition
- Recurring revenue from loyal subscriber base
❌ Weaknesses:
- Reputation damage
- Regulatory risks
- Loss of major partner (Novo Nordisk)
🧠 Bonus Tips for Investors
- Track regulatory updates: The FDA’s stance will shape the future of compounded medications.
- Watch earnings calls: Management’s plans on weight-loss and compliance will reveal future strategy.
- Diversify holdings: Don’t rely solely on high-growth telehealth stocks.
- Review alternative providers: Compare Hims to rivals like Teladoc or Ro for context.
- Set alerts for any SEC filings or public legal disputes involving Hims.
FAQ Section
Why did Hims stock fall?
Hims stock dropped after Novo Nordisk ended their partnership, citing concerns about the compounding and marketing of semaglutide-based treatments.
Can Hims still sell weight-loss drugs?
Yes, but not semaglutide-based products unless allowed under specific state laws. The company is shifting toward alternatives like liraglutide.
Is Hims stock a buy or sell?
It depends on your risk profile. While short-term volatility is high, long-term fundamentals like subscriber growth remain strong.
Is Hims under investigation?
Not currently. However, there is potential for regulatory review due to compounded medication concerns.
👤 Author Bio
Written by the Swipywiro Team
Swipywiro.com covers breaking news and deep analysis in the world of stocks, cryptocurrency, and financial markets—with a U.S. focus and SEO-friendly delivery.
⚠️ Financial Disclaimer
This article is for informational purposes only. It does not constitute investment, financial, or legal advice. Always consult with a qualified advisor before making investment decisions.
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