logo
Hims & Hers stock plummets after Novo Nordisk ends partnership over 'knock-off' Wegovy

Hims & Hers stock plummets after Novo Nordisk ends partnership over 'knock-off' Wegovy

Fast Companya day ago

This morning, the Danish pharmaceutical giant Novo Nordisk announced the abrupt end of its brief partnership with telehealth company Hims & Hers Health, Inc. (NYSE: HIMS), citing concerns over Hims & Hers' 'knock-off' weight loss drugs. Now, Hims & Hers' shares are plummeting as investors react to the news.
It's the latest update in a somewhat volatile year for Hims & Hers. Just this April, the company's stock spiked after it initially announced a collaboration with Novo Nordisk that allowed Hims & Hers to sell Novo Nordisk's FDA-approved weight loss drug, Wegovy, through its platform. But less than two months later, that partnership is fracturing after Novo Nordisk's claim that Hims & Hers engaged in 'deceptive promotion and selling of illegitimate, knockoff versions of Wegovy that put patient safety at risk.'
At the time of this writing, HIMS stock is down 32.6% since market open. Here's what to know about the break-up:
The shortage that fueled knock-off Wegovy
Back in 2022, the Food and Drug Administration (FDA) declared a shortage of GLP-1 medications including Ozempic and Wegovy. Under this shortage notice, pharmacies were permitted to make compounded versions of the brand name drugs using their active ingredient, semaglutide, and sell them at a lower cost. Hims & Hers was one company that took part in selling a compounded—and non-FDA-approved—version of Wegovy.
Then, this February, the FDA announced that Ozempic and Wegovy were no longer categorized under a shortage. With the brand name drugs fully back on the market, the FDA gave compounders 60 to 90 days to stop making copies of the patented drugs.
At the time, Hims & Hers stated in a regulatory filing that, while it saw pathways to continue offering access to certain compounded GLP-1s after the shortage, it could not 'guarantee that we will be able to continue offering these products in the same manner, to the same extent, or at all.' However, an analyst told Reuters that Hims & Hers appeared poised to continue selling compounded semaglutide using 'personalized doses' after the shortage officially ended.
Why is Novo Nordisk cutting ties now?
In the wake of the FDA's shortage notice, Hims & Hers announced in April that it was entering a 'long-term collaboration' with Novo Nordisk to offer Wegovy directly to its consumers. Now, though, Novo Nordisk is breaking off the commitment over claims that Hims & Hers has not acted fast enough to stop selling its compounded GLP-1. Other telehealth companies, like Ro and Noom, have similarly faced criticism for continuing to sell their own compounded GLP-1 despite agreements with Eli Lilly, the maker of Zepbound.
In an email to Fast Company, a Novo Nordisk spokesperson explained that 'semaglutide compounding is permitted under US compounding laws only in rare instances,' adding that other companies it's working with have 'demonstrated a good faith effort to transition patients to authentic, FDA-approved Wegovy.'
However, the spokesperson continued, 'after over one month into the collaboration, Hims & Hers Health, Inc. has failed to adhere to the law which prohibits mass sales of compounded drugs under the false guise of 'personalization' and are disseminating deceptive marketing that puts patient safety at risk. This is unacceptable and that is why we have decided to end the collaboration.'
That personalization, involves offering the same drug; however, at different doses.
In a press release published this morning, Novo Nordisk also noted that it is 'deeply concerned' about knock-off drugs 'made with foreign illicit active pharmaceutical ingredients.'
'Based on Novo Nordisk's investigation, the 'semaglutide' active pharmaceutical ingredients that are in the knock-off drugs sold by telehealth entities and compounding pharmacies are manufactured by foreign suppliers in China,' the release reads. 'According to a report from the Brookings Institute, FDA has never authorized or approved the manufacturing processes used by any of these foreign suppliers to make semaglutide, nor has FDA ever reviewed or authorized the quality of the 'semaglutide' they produce.'
Hims & Hers did not immediately respond to Fast Company 's request for comment on Novo Nordisk's claims. On X, Novo Nordisk CEO Andrew Dudam said 'Novo Nordisk's commercial team increasingly pressured us to control clinical standards and steer patients to Wegovy regardless of whether it was clinically best for patients. We refuse to be strong-armed by any pharmaceutical company's anticompetitive demands that infringe on the independent decision making of providers and limit patient choice.' He went on to say 'We will continue to offer access to a range of treatments, including Wegovy, to ensure providers can serve the individual needs of patients.'

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

How Synthflow AI is cutting through the noise in a loud AI voice category
How Synthflow AI is cutting through the noise in a loud AI voice category

TechCrunch

time32 minutes ago

  • TechCrunch

How Synthflow AI is cutting through the noise in a loud AI voice category

The conversational AI market has exploded since ChatGPT was released in November 2022 and is predicted to grow into a nearly $50 billion global industry by 2031, according to MarketsAndMarkets. Synthflow AI is just one of many companies building in this space that hopes to stand out from the pack because of its focus on being enterprise-grade and easy to set up. Berlin-based Synthflow is a no-code platform that lets enterprises build and deploy customized white-labeled voice AI customer service agents. The company, which launched in 2023, has amassed more than 1,000 customers and has handled more than 45 million calls. The startup's voice agents are both HIPAA and GDPR compliant and can be plugged into more than 200 integrations with other enterprise platforms including Salesforce, Twilio, and HubSpot, among others. Hakob Astabatsyan, co-founder and CEO, told TechCrunch that he and his co-founders, Albert Astabatsyan, now CPO, and Sassun Mirzakhan-Saky, now CTO, started messing around with OpenAI's ChatGPT API back in early 2023 to find potential ways to build no-code business applications on top of the AI model. They started with a text-to-text AI bot and then tried to build a voice bot. When they realized how much harder voice was, they got excited about the potential. 'We realized, oh my god, voice is really complicated, right? To actually make AI speak in real time like we do, having this 400 milliseconds latency, and handling interruptions, it turned out to be like such a complicated task,' Astabatsyan said. 'We fell in love with this problem, and we said, look, we're gonna work only on voice bots from now on.' Techcrunch event Save $200+ on your TechCrunch All Stage pass Build smarter. Scale faster. Connect deeper. Join visionaries from Precursor Ventures, NEA, Index Ventures, Underscore VC, and beyond for a day packed with strategies, workshops, and meaningful connections. Save $200+ on your TechCrunch All Stage pass Build smarter. Scale faster. Connect deeper. Join visionaries from Precursor Ventures, NEA, Index Ventures, Underscore VC, and beyond for a day packed with strategies, workshops, and meaningful connections. Boston, MA | REGISTER NOW The group formed Synthflow and spent the rest of 2023 building and launched its first version of the product at the beginning of 2024 before releasing an enterprise-grade version of the tech at the end of the year. The company grew 15x last year and has seen over 90% retention from its enterprise customers, according to Astabatsyan. 'We process 5 million calls monthly,' he said. 'Last year, it was like, I don't know, 1 million, 2 million, and and then we started growing very quickly. This is where Synthflow started really getting better and better because we had this velocity.' The startup also recently raised a $20 million Series A round led by Accel with participation from existing investors Atlantic Labs and Singular. Astabatsyan said the company raised this recent round so that it could expand its team, boost research and development, and open its first U.S. office in an undecided location. Luca Bocchio, a partner at Accel, told TechCrunch that the Accel team had been tracking Synthflow since it started developing its first product. What stood out to Bocchio was the founding team's drive and its early push into building enterprise-friendly integrations. 'This team has [had] really strong views since the getgo about creating more depth with the technology and extensive integrations across CRMs, across tools enterprises may use to really provide enterprise-grade compliance,' Bocchio said. Regardless of the company's traction, conversational AI seems poised to be a tough category. There are numerous other companies building in the space including Bret Taylor's Sierra, which has raised $285 million in VC money, and Bland AI, which has raised more than $50 million in venture funding, to name a couple. 'AI is moving so fast, and sometimes things happen faster than you would expect,' Astabatsyan said. 'But for us, it's very clear. We're at this stage where, I would say, [we're] in a post-product-market-fit era, where we know who our customers are. We have a pretty clear idea what's our product roadmap, and where we want to be in the next three to five years.'

Cellugy Raises 8.1 Million Euros to Eliminate Microplastics in Personal Care Products
Cellugy Raises 8.1 Million Euros to Eliminate Microplastics in Personal Care Products

Yahoo

timean hour ago

  • Yahoo

Cellugy Raises 8.1 Million Euros to Eliminate Microplastics in Personal Care Products

PARIS — Danish biotech company Cellugy has raised 8.1 million euros from the European Union to eliminate microplastics in personal care products and to use a bio-based alternative instead. Cellugy's Biocare4life project received the grant from the Life program, an EU funding branch supporting projects backing environmental and climate action. The raise is to accelerate the production scale-up toward commercializing Cellugy's biofabricated material platform, called EcoFlexy. More from WWD Fragrance Dupe Brand Dossier Is Opening Stores Paris Good Fashion Report Says 20% Volume Cut Needed by 2030 to Stay Within Climate Limits From Flooding to Heat Stress, Climate Challenges Are Threatening the Shoe Industry Like Never Before EcoFlexy Rheo is the platform's debut product. It's the first high-performance rheology modifier that's totally bio-based, biodegradable and competitively priced, according to Cellugy, which is based in Søborg, Denmark. That is meant to give the personal care industry a good alternative to microplastics and fossil-based ingredients that are widely used. 'EcoFlexy is designed to replace fossil-based carbomers, known as harmful microplastics, significantly reducing environmental pollution and the use of hazardous chemicals in the cosmetics sector,' Cellugy said in a statement. 'It delivers superior product performance and adaptable sensorial properties, along with scalable, operationally efficient manufacturing to meet the needs of a fast-evolving beauty industry focused on sustainability and innovation,' the company continued. Many personal care products, such as facial scrubs and liquid soaps, can release microplastics, adding to environmental pollution. 'Recent research also suggests that microplastics can enter the human body through inhalation, ingestion or skin contact, raising questions about their potential impacts on human health,' Cellugy said. It explained rheology modifiers are essential to all personal care products, but that almost 70 percent of the 2.8-billion-euro rheology modifier market is dependent on fossil-based carbomers and acrylates, which are listed under the EU's Reach regulation because of their persistent and toxic nature, Cellugy said. 'Through the Biocare4life project, EcoFlexy is positioned to prevent the release of 259 tons of microplastics annually by project completion, scaling dramatically to 1,289 tons per year by 2034, equivalent to removing millions of contaminated beauty products from the market each year,' Cellugy said. The company said the timing is key as reports suggest the beauty industry might lose around 12 billion euros because of the EU microplastic ban and U.S. restrictions on PFAS, or 'forever chemicals.' Challenges abound. 'An alternative material that simply aims to be more sustainable is not enough. The critical challenge is about delivering bio-based solutions that actually outperform petrochemicals in performance parameters like texture, functionality and user experience, while also being scalable and operationally efficient,' said Isabel Alvarez-Martos, chief executive officer and cofounder of Cellugy, in the statement. 'Good intentions won't drive industry change. We need higher-quality alternatives like EcoFlexy that make it easier, not harder, for brands to choose sustainability,' she continued. 'Only when bio-based materials match or exceed the performance and economics of traditional ingredients will we see the transformation needed to protect both human health and our planet.' The Biocare4life project is to drive EcoFlexy's scale-up process via the work of a specialist consortium of experts in biotech, sustainability and data management. These include The Footprint Firm, a consultancy focused on circular economy solutions and environmental impact validation, and Sci2sci, a start-up focused on data management, machine learning and AI-driven process optimization. 'The project signals real progress toward more sustainable manufacturing in the personal care sector,' said Will Nunn, manager at The Footprint Firm. 'The project's combination of technical innovation and sustainability validation positions EcoFlexy very strongly for market adoption and supports the EU's broader transition to a more resource-efficient economy.' 'Scaling a biotech solution is never simple, but it's where the real value lies,' continued Angelina Lesnikova, Sci2sci CEO. 'Together, we have the potential to make sustainable chemistry economically irresistible as well as environmentally essential.' The funding is expected to back Cellugy's scaling activities, process optimization and commercial validation over four years. Best of WWD Which Celebrity Brands Are Next for a Major Deal? Lady Gaga, Beyonce and More Possible Contenders for the Next Corporate Prize The Best Makeup Looks in Golden Globes History A Look Back at Golden Globes Best Makeup on the Red Carpet, From Megan Fox to Sophia Loren [PHOTOS]

The Fears Dominating the NATO Summit
The Fears Dominating the NATO Summit

New York Times

timean hour ago

  • New York Times

The Fears Dominating the NATO Summit

If the meeting of NATO heads of state in The Hague needed a catchy movie title, it could be 'The Summit of Fear.' At a gathering shadowed by the U.S.-Israeli conflict with Iran, the fears dominating this week's NATO meeting fall in two camps: the fear of offending, or at least alienating, Donald Trump, the president of the alliance's most powerful partner, and the fears of NATO countries near Russia that President Vladimir Putin's aggression could spread to them. Trump, who arrived on Tuesday, has given the European members of NATO plenty of reason to worry. He has humiliated President Volodymyr Zelensky of Ukraine in the White House, praised Russia, called for the incorporation into the United States of NATO-member territory (see Denmark's Greenland and Canada) and imposed tariffs on allies. Above all, he demanded that other members pay more for the alliance's collective defense, threatening that America might not protect countries that didn't. The resulting sense of trepidation — call it the Trump tiptoe effect — has shaped the summit's primary goal: for NATO's 32 members to raise their defense spending to 5 percent of their gross domestic product, from the current goal of 2 percent, which NATO officials have said they've agreed to do. The clever trick to make that level of spending actually possible was to split up the 5 percent figure into 3.5 percent of G.D.P. for defense and 1.5 percent for military-related infrastructure improvements — like building bridges strong enough to carry tanks and upgrading hospital emergency rooms. It's an ill-defined and elastic category, and a deadline for nations to reach the 5 percent benchmark has not yet been established, though 2035 has been suggested, and a progress report is expected in 2029. NATO's secretary general, Mark Rutte, said at a news conference on Monday that within 'three, five, seven years' Russia would 'be able to successfully attack us.' So starting that extra spending right away is necessary, he said. Want all of The Times? Subscribe.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store