Novo Nordisk (NVO) Stock Rallies as FDA Forces Hims to Scrap Weight-Loss Pill

TLDR

Table of Contents

Novo Nordisk stock surged 8% Monday after Hims & Hers withdrew its $49 weight-loss pill under FDA pressure
FDA announced plans to restrict compounded GLP-1 drugs, boosting Novo’s competitive position
Hims & Hers stock dropped 14.8% in premarket trading following the product cancellation
Novo’s market value has fallen nearly two-thirds since June 2024 due to intense pricing competition
Analysts view FDA’s crackdown as positive for both Novo Nordisk and Eli Lilly

Novo Nordisk shares rallied over 8% in Copenhagen trading Monday after Hims & Hers Health scrapped its $49 weight-loss pill launch. The telehealth company reversed course following legal threats from Novo and regulatory pressure from the FDA.

Novo Nordisk A/S, NVO

The stock surge pushed Novo’s shares above levels seen before Hims announced its compounded version of semaglutide. Investors viewed the FDA’s intervention as a signal of broader enforcement against compounded GLP-1 medications.

Hims & Hers had introduced the pill Thursday using semaglutide, the same ingredient found in Novo’s Wegovy and Ozempic. The launch immediately drew opposition from both Novo Nordisk and federal regulators.

By Saturday, Hims announced it would discontinue the product after holding discussions with stakeholders. The company’s stock plunged 14.8% in premarket trading Monday.

FDA Takes Aim at Compounded GLP-1 Market

The FDA said Friday it would restrict GLP-1 ingredients used in non-approved compounded drugs. These products have been sold by telehealth companies and compounding pharmacies as budget-friendly alternatives to authorized treatments.

FDA Commissioner Marty Makary indicated the agency would strengthen oversight of unauthorized compounded GLP-1 medications. The regulator cited quality concerns, safety issues, and potential violations of federal law.

Sydbank analyst Soren Lontoft Hansen said the FDA is targeting compounded GLP-1 drugs broadly, not just Hims’ specific product. This regulatory stance benefits both Novo Nordisk and competitor Eli Lilly, according to analysts at Sydbank and Jyske Bank.

An Eli Lilly spokesperson confirmed the company welcomed the FDA’s decision. Barclays analyst James Gordon noted that Hims’ $49 monthly pricing had initially raised concerns for branded drugmakers.

Pricing Battles Continue Despite Win

Novo’s shares had already gained over 5% Friday when the FDA first signaled its crackdown. However, the stock faces ongoing pressure from fierce competition in the GLP-1 market.

Novo Nordisk’s market capitalization has plummeted nearly two-thirds since its June 2024 peak. The stock has fallen roughly 50% over the past year.

Last week, shares dropped 17% in one session after Novo warned of “unprecedented price pressure” during its annual earnings report. The company shocked Wall Street by projecting revenue and earnings could decline up to 13% in 2026.

This forecast ends a streak of double-digit growth. President Trump’s efforts to reduce drug prices have increased competition in the profitable obesity treatment sector.

Eli Lilly has gained ground in U.S. prescription trends and forecast 2026 earnings above analyst expectations. Lilly’s oral GLP-1 drug orforglipron is scheduled to launch in April.

Compounding pharmacies still offer injectable semaglutide versions. In the crucial U.S. market, drugmakers are increasingly using cash-pay channels and telehealth platforms to reach consumers.

Hims, Novo Nordisk, and Eli Lilly all aired commercials during Sunday’s Super Bowl promoting their weight-loss products. Novo Nordisk stock remains down approximately 2% year-to-date.

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