Shares in Hims & Hers (HIMS) surged 40% to $22 on Wall Street after the American health and wellness platform ended its dispute with Novo Nordisk (NVO) by forming a partnership with the Danish drugmaker.
Wegovy-maker Novo now plans to sell its weight-loss drugs on the Hims & Hers Health platform, bringing a vicious spat between the two companies to an amicable conclusion.
| Share price: $22 (+40%) | PE: 31.4 |
| Market cap: $3.6bn | Yield: N/A |
San Francisco-headquartered Hims & Hers will no longer advertise compounded GLP-1 offerings, and existing patients will have the opportunity to transition to US Food and Drug Administration (FDA)-approved offerings.
However, Hims & Hers said it will still offer those products ‘if a provider determines that a compounded product is clinically necessary’. It will now start offering Novo Nordisk’s Ozempic and Wegovy pills and injections starting later this month.
Tremendous opportunities
‘We see tremendous growth opportunities in the US with the expanding assortment of branded GLP-1 medications,’ said Hims & Hers CEO Andrew Dudum.
‘I’m excited to have a great partner in Novo Nordisk as we work to create a new model that works for everyday people. This collaboration reflects what’s possible globally when drugmakers, biotech companies, and diagnostic leaders partner with consumer platforms to support scaled distribution of their latest medical innovations.’
Rollercoaster ride
Crucially, Novo Nordisk is dismissing its lawsuit against Hims & Hers ‘without prejudice’.
The Danish drugs giant had previously sued Hims & Hers on the grounds of patent infringement after the US firm launched, then cancelled, a $49 copy of Novo’s oral obesity pill.
The US FDA even threatened legal action against Hims & Hers, which provides prescription medications, over-the-counter medications and personal care products through a direct-to-consumer model.
Hims & Hers has taken investors on a rollercoaster ride in recent periods, with the shares up 40% over five years, but down almost 40% over one year.
Shares in Novo Nordisk have fallen 50% over the past year.
The Danish healthcare company is struggling to fend off competition in the weight-loss drug market, most notably from American pharmaceutical giant Eli Lilly (LLY), while a study of a next-generation medication from the firm also disappointed investors.
Read the press release here: https://investors.hims.com/news/default.aspx
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