Novo exits Hims & Hers partnership, citing ‘deceptive marketing' concerns

Los Angeles Times

6 days ago

Novo Nordisk A/S scrapped a partnership with Hims & Hers Health Inc. after less than two months, saying the U.S. company is using 'deceptive marketing' to sell copycat versions of its obesity blockbuster Wegovy.
Hims, a San Francisco based telehealth platform, wasn't stepping back enough from its practice of mass marketing off-brand imitations of the weight-loss medicine, Novo executives said.
'The big issue with Hims is that we had an agreement that the mass compounding would stop and unfortunately it didn't stop,' said Ludovic Helfgott, executive vice president of product and portfolio strategy at Novo, in an interview. 'That's why we ended the partnership.'
In a post on X, Hims Chief Executive Officer Andrew Dudum called Novo executive comments 'misleading.' He said Novo had been pressuring Hims to 'steer patients to Wegovy regardless of whether it was clinically best for patients.'
'We refuse to be strong-armed,' he said, adding that Hims will continue to offer 'a range of treatments, including Wegovy.'
Hims shares tumbled 35% in New York Monday — the most ever — as analysts said the withdrawal would leave the telehealth company without an attractive obesity profit stream. Novo shares fell 5.3% in Copenhagen on Monday, while Lilly gained 1%.
The split is the latest in a series of unpleasant surprises for Novo that began last year after it became Europe's most valuable company due to the success of Wegovy and the related diabetes drug Ozempic. The Danish drugmaker has ousted its CEO and faced clinical-trial setbacks and waning obesity market share in the US. Novo had counted on the Hims partnership to broaden access in the US, where it's losing ground to Eli Lilly & Co.
Dave Moore, executive vice president of Novo's US operations, said in an interview that the Hims partnership 'just wasn't aligning with our vision and where we thought the collaboration was going to go.'
Novo needed more time to ensure a consistent supply of Wegovy than Lilly did to ramp up on its rival drug Zepbound. That gave so-called compounders, which make copycat versions of Wegovy that may be tweaked slightly to personalize them, more of a foothold.
Adding to the Danish company's woes were disappointing clinical trial results for its next-generation drug CagriSema. The setbacks led to change at the top: Novo announced last month that CEO Lars Fruergaard Jorgensen will step down. The company has not yet chosen a replacement.
Hims, best known for selling treatments for hair loss and erectile dysfunction, began offering copycat obesity drugs last year when Lilly's and Novo's brand medications were in short supply, leaving millions of Americans looking for alternatives.
The platform teamed up with Novo in late April to offer Wegovy at a discounted price to clients. At the time, Hims CEO Dudum said the deal would be the beginning of the two companies 'working together to collaborate on what could be a very broad roadmap' of different types of drugs.
Hims also said at the time that it still planned to offer compounded shots to a limited group of patients who required so-called personalized dosages of the medication, which is technically allowed under US Food and Drug Administration rules.
Yet Novo didn't see Hims change its business enough in recent weeks, Moore said. Novo has been watching Hims' actions in the month since FDA restrictions on widespread compounding went into effect, he said.
Hims didn't adhere to the law prohibiting 'mass sales' of compounded medicines that have been tweaked to be considered personalized, according to Novo, and was 'disseminating deceptive marketing that put patient safety at risk.'
Compounded medicines are made by pharmacies and have been allowed in the US to plug the gaps if drugs are in short supply or in order to tweak ingredients slightly.
Novo said it's still interested in working with telehealth companies as long as they don't engage in mass marketing of compounded Wegovy. Monday's announcement is a 'clear message' to other partners, according to Moore. Novo has agreements with LifeMD Inc. and Ro.
For Hims, the breakup 'creates more questions on where the pathway forward for weight loss goes,' Leerink Partners analyst Michael Cherny said in a note. 'The revenue split from the NovoCare deal would have provided a different profit stream than personalized sales but still would have been quite additive.'
Kresge and Muller write for Bloomberg.