Novo Nordisk Drops Hims & Hers Over 'Misleading' Wegovy Copies

Danish pharmaceutical giant Novo Nordisk's stock price plummeted on Monday, driven by investor skepticism about its next-generation weight-loss drugs and the company's announcement to terminate its partnership with telehealth platform Hims & Hers.

Novo Nordisk's U.S.-listed shares opened down more than 6%.

The company released new trial data over the weekend for two next-generation weight-loss drugs - CagriSema and amycretin.

The data showed that amycretin helped patients lose an average of more than 24% of their body weight in early-stage trials, compared to about 17% weight loss for Novo's current weight-loss drug Wegovy.

Like Wegovy, amycretin works by mimicking gut hormones to suppress appetite, delay stomach emptying, and regulate blood sugar. But unlike Wegovy, amycretin also incorporates amylin, another appetite-regulating hormone secreted by the pancreas.

Amycretin comes in both once-weekly injections and once-daily pill forms. Trial data showed its side effects were broadly similar to existing weight-loss drugs. The injection group lost an average of 24.3% of body weight after 36 weeks of treatment at 60mg weekly, while the oral group lost up to 13.1% after 12 weeks.

The market was more focused on the performance of CagriSema, which combines semaglutide (the active ingredient in Wegovy) with the experimental amylin-mimetic drug cagrilintide.

A study released last December showed obese patients using CagriSema lost an average of 20.4% of body weight, falling short of the company's highly publicized 25% target. Another study in March on diabetic patients using CagriSema also disappointed investors.

Novo Nordisk released complete data from both trials over the weekend to convince investors the drug remains competitive.

However, the market viewed CagriSema as not only missing the company's targets but also failing to clearly outperform rival Eli Lilly's Zepbound (tirzepatide).

This reignited investor concerns that Novo Nordisk is losing its competitive edge to Eli Lilly in the GLP-1 drug race.

Novo Nordisk's stock has fallen more than 50% over the past year amid increasing competition for semaglutide and disappointing clinical trial results for CagriSema.

Novo Nordisk announced Monday it would end its partnership with Hims & Hers over concerns about the telehealth company's sales and promotion of low-cost Wegovy alternatives.

In April, Novo Nordisk said it would expand Wegovy distribution through multiple telehealth platforms including Hims & Hers as U.S. supply normalized.

But on Monday, Novo Nordisk said Hims & Hers failed to comply with relevant laws and allegedly engaged in mass sales of compounded drugs under the guise of "personalization." The company also accused Hims & Hers of "misleading" marketing practices that endangered patient safety.

Hims & Hers shares plunged nearly 30% on the news.