Hims & Hers Health Inc. ( HIMS ) has been one of 2025’s hottest telehealth stocks, nearly doubling in value year to date, but a deepening clash with Novo Nordisk A/S ( NVO ) over compounded weight-loss drugs, and shifting FDA rules, has turned momentum into headwinds, sending shares sliding 10% in the past three months.

The telehealth company’s stock has surged to almost double year to date. However, over the last three months, the stock has fallen around 10%. In June, the stock cratered almost 30% when Novo Nordisk ( NVO ) discontinued working with the company in relation to direct access to Wegovy (semaglutide).

Novo Nordisk ( NVO ) alleged that Hims & Hers Health ( HIMS ) failed to adhere to the law prohibiting mass sales of compounded drugs under the false guise of “personalization” and is disseminating deceptive marketing that risks patient safety.

Also Read: Eli Lilly’s Rare Weight Loss Data Miss Could Benefit Competitors

Hims & Hers Health ( HIMS ) shares are under pressure largely because the firm sells cheaper, compounded versions of popular weight-loss drugs. Regulators typically permit compounded versions of drugs to enter the market to meet demand when there’s an official shortage of the brand-name product.

However, the FDA announced earlier this year that semaglutide, the active ingredient in Wegovy, had been removed from the drug shortage list. This change had a notable impact on Hims & Hers.

Reuters noted that Novo Nordisk ( NVO ) is suing dozens of U.S. pharmacies and companies for selling cheaper copies of its weight-loss drug Wegovy. But Hims & Hers is missing from the list.

Novo Nordisk ( NVO ) said it isn’t ruling out more legal action after filing new lawsuits against 14 small pharmacies, telehealth providers, and weight-loss clinics this week.

The Danish drugmaker has already brought over 130 cases in 40 U.S. states but would not comment on Hims & Hers specifically.

Hims & Hers told Reuters that customized medicines are the future of healthcare, adding that its platform helps patients and providers make treatment decisions together.

Legal experts say Novo Nordisk’s growing legal push against smaller telehealth companies could pressure firms like Hims & Hers to consider a settlement or help Novo Nordisk ( NVO ) refine its legal strategy.

The FDA has given compounding pharmacies until May 22 to stop mass-producing copies of Novo Nordisk’s Wegovy, which is only allowed when the drug is in short supply. Hims & Hers says it still offers customized versions of Wegovy in doses Novo Nordisk ( NVO ) doesn’t make, claiming this is legal under compounding rules and meets individual patient needs.

In July, Novo Nordisk ( NVO ) trimmed its 2025 outlook, driven by lower growth expectations for the second half of 2025, reflecting the persistent use of compounded GLP-1s, slower-than-expected market expansion, and competition.

In the second quarter of 2025, Hims & Hers’ revenue grew 73% year over year to $544.83 million, missing analyst estimates of $549.83 million.

The update highlighted the disruptive role of companies like Hims & Hers, which offer patients access to more affordable, compounded versions of GLP-1 medications.

Subscribers grew to over 2.4 million in the quarter, up 31% year-over-year. Gross margin came in at 76% in the second quarter. Monthly online revenue per average subscriber jumped 31% to $74.

Analysts and market reports suggest that Hims & Hers is directly benefiting from the accessibility and pricing challenges faced by Novo Nordisk ( NVO ) and its competitor, Eli Lilly and Co. ( LLY ) .

Price Action: HIMS stock is trading lower by 4.84% to $47.56 at last check Tuesday.

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