Regulatory Pressure and Patent Fight Drag Hims & Hers Shares Lower

Key takeaways
- FDA referral to DOJ: Potential review for breaches of federal law
- Possible outcomes: Injunctions and civil or criminal penalties
- Additional stress: Novo Nordisk filed a patent suit on Monday
- Share activity: The stock hit a new 52-week low of $16.69 at the Wednesday close

FDA moves escalate toward the DOJ

The trigger, per a Reuters report, centers on Hims & Hers’ attempt to market a compounded version of Wegovy. If the government pursues this path, it could pursue remedies such as a court order barring further activity or civil/criminal penalties, potentially arising from a claim under the Food, Drug and Cosmetic Act for marketing an unapproved drug.

Mike Stuart, the top lawyer at the U.S. Department of Health and Human Services, confirmed to CNBC that the FDA has handed the matter to the DOJ. He cited aims to protect pharmaceutical investments in the standard FDA approval process and to safeguard product safety as part of the rationale for shifting the case to DOJ.

Legal experts cautioned that the government’s leverage could be constrained by the company’s swift withdrawal of the offering. In a subsequent step, the FDA could request additional materials and prescribing records to assess whether prescriptions were properly documented.

Novo Nordisk patent suit heightens the pressure

Concurrent with the regulatory push, Novo Nordisk has been pursuing a patent-infringement claim against Hims & Hers. Reuters notes this marks the Danish company’s first U.S. patent case against a compounding supplier related to Wegovy.

Should investors sell immediately? Or is it worth buying Hims & Hers?

Hims & Hers reacted strongly via a statement on X (formerly Twitter), calling the lawsuit an “obvious attack” by a Danish company on millions of Americans who rely on compounded medications for personalized care.

Shares under pressure, new 52-week low

The confluence of legal and regulatory risks has clearly weighed on the stock. The company’s investor relations page shows a close of $16.69 on the most recent session, a fresh 52-week low. Earlier in the week, the stock closed at $19.33 on Monday and $17.24 on Tuesday, according to historical data.

Trading activity underscored the sentiment. Monday’s session saw more than 144 million shares change hands, well above the roughly 20 million-average daily volume. Over the past three months, the stock has fallen by more than 55%, according to Zacks Investment Research, driven by the string of weighty headlines.

Upcoming results in the spotlight

Hims & Hers is scheduled to report its fourth-quarter results and full-year 2025 on February 23, a date that will attract extra attention given the current regulatory and legal backdrop.

Note: All figures above are in USD.