Hims & Hers Health Lawsuit: Navigating Risk and Recovery in a Plunging Stock

Investors in Hims & Hers Health, Inc. (NASDAQ: HIMS) face a critical crossroads: the company's stock has cratered following a partnership collapse and a securities fraud lawsuit, but legal avenues remain open to mitigate losses. Here's what you need to know about the risks, the class action opportunity, and why time is of the essence.

The Legal Allegations: A Blueprint for Fraud Claims

The lawsuit, filed in the U.S. District Court for the Northern District of California, accuses Hims & Hers of misleading investors about its partnership with Novo Nordisk, the maker of Wegovy, a popular weight-loss drug. Key allegations include:
- False Claims of Regulatory Compliance: Hims & Hers asserted that its sales of Wegovy and compounded semaglutide (a generic version of Wegovy's active ingredient) adhered to FDA rules. In reality, the FDA had already resolved the Wegovy shortage in April 2025, requiring compounded versions to cease production by specific deadlines. Hims & Hers allegedly ignored these mandates.
- Deceptive Marketing of Knockoffs: Novo Nordisk terminated the partnership on June 23, 2025, accusing Hims & Hers of selling counterfeit Wegovy containing unapproved APIs from Chinese manufacturers. These drugs, marketed under the guise of “personalized medicine,” violated FDA regulations and posed safety risks.
- Omitted Partnership Risks: The complaint asserts that Hims & Hers failed to disclose the fragility of its Novo Nordisk partnership, which was contingent on strict compliance with FDA guidelines.

The result? A 34.6% stock plunge in three days, from $64.22 to $41.98, as investors reacted to the scandal.

Why This Matters for Investors

Hims & Hers' stock now trades at a fraction of its pre-lawsuit value, and further declines could follow due to regulatory fines, operational disruptions, and reputational damage. The company's ability to rebuild its business hinges on resolving legal battles and regaining FDA trust—outcomes far from certain.

For shareholders, two paths exist:
1. Wait and Hope: Hold the stock in hopes of a rebound. However, with the company's credibility shattered and Wegovy sales halted, this is a risky bet.
2. Join the Class Action: Pursue recovery through the securities fraud lawsuit, which seeks compensation for investors who bought shares between April 29, 2025, and June 23, 2025.

Strategic Advantages of Joining the Class Action

The law firm Bleichmar Fonti & Auld LLP—with a proven track record, including recoveries of $900 million from Tesla and $420 million from Teva Pharmaceutical—is leading the case. Here's why participation matters:

1. Strong Legal Grounding

The lawsuit cites violations of Sections 10(b) and 20(a) of the Securities Exchange Act, which target material misstatements and omissions. Hims & Hers' false claims about regulatory compliance and partnership stability are clear red flags under these statutes.

2. Contingency Fee Structure

Shareholders aren't liable for legal costs unless the case succeeds, reducing financial risk.

3. Time-Sensitive Deadline

The August 25, 2025, deadline to request lead plaintiff status is non-negotiable. Delaying could forfeit eligibility, even if you hold qualifying shares.

4. Potential Recovery Scale

While the exact payout is uncertain, the stock's $22.24 drop translates to over $1 billion in market cap evaporated in days—a figure that could anchor settlement discussions.

Investment Advice: Act Before August 25

• If You Hold HIMS Shares Purchased Before June 23: File to join the class action immediately. Even if you still own the stock, participation doesn't require selling, and recoveries could offset losses.
• If You Sold After the Drop: You may still qualify if the sale was driven by the lawsuit's revelations.
• Avoid New Purchases: Hims & Hers' future is clouded by regulatory scrutiny and operational challenges. Wait for clarity on legal outcomes and business strategy shifts.

Final Thoughts

The Hims & Hers saga underscores the importance of due diligence in volatile sectors like telehealth and weight-loss pharmaceuticals. For those caught in this storm, the class action represents a lifeline—a chance to claw back losses from a company that allegedly prioritized growth over ethics.

The clock is ticking: August 25 is the cutoff. Investors who act swiftly may not only recover part of their capital but also send a message that corporate misstatements won't go unanswered.

Avi Salzman is a pseudonymous analyst specializing in legal and regulatory risks in healthcare and tech investments. This analysis is for informational purposes only and not financial advice.