What Happened?
Shares of telehealth company Hims & Hers Health (NYSE: HIMS) fell 23.6% in the morning session after the company stopped offering its copycat version of Novo Nordisk's popular weight-loss drug, Wegovy, following intense regulatory pressure and legal action.
The decision to halt the product came after the U.S. Department of Health and Human Services referred the telehealth company to the Department of Justice for a potential investigation into violations of the Federal Food, Drug, and Cosmetic Act. Compounding the company's problems, Wegovy's maker, Novo Nordisk, filed a lawsuit against Hims & Hers. Novo Nordisk accused the company of patent infringement and creating unsafe, knock-off drugs through what it called "illegal mass compounding and deceptive marketing." This combination of a federal probe and a lawsuit from the pharmaceutical giant appeared to be the final catalyst for Hims & Hers to reverse its plans.
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What Is The Market Telling Us
Hims & Hers Health’s shares are extremely volatile and have had 81 moves greater than 5% over the last year. But moves this big are rare even for Hims & Hers Health and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 20 days ago when the stock dropped 2.2% on the news that Morgan Stanley reiterated its Equalweight rating but voiced concerns about the company's slowing growth and increasing competition.
The firm pointed to a significant slowdown in revenue growth. Morgan Stanley's report noted that growth was projected to slow to 17% in 2026, a sharp drop from the 111% year-over-year growth seen in the first quarter of 2025. The analyst note also highlighted specific worries about the men's sexual health business, expecting it to be a drag on growth in the first half of 2026. This was attributed to a shift in subscription plans and more intense price competition. Additionally, the firm cited weak third-party sales data and potential risks to the company's profit margins as near-term issues.
Hims & Hers Health is down 47.2% since the beginning of the year, and at $17.66 per share, it is trading 74.3% below its 52-week high of $68.74 from February 2025. Investors who bought $1,000 worth of Hims & Hers Health’s shares 5 years ago would now be looking at an investment worth $751.36.
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