Novo Nordisk has dismissed its patent infringement case against telehealth provider Hims and Hers after settling the two sides. Hims will market the branded medicines of Novo on Hims as part of the deal instead of marketing its own version of the compounded medicine.
On Monday, CEO Mike Doustdar told CNBC’s Charlotte Reed that Novo Nordisk will drop the current court proceedings but may reinstate them if necessary, although he does not expect that to happen.
The agreement provides Hims with a right to injectable and oral semaglutide marketed as Ozempic and Wegovy. Prices of the drugs will be equivalent to other telehealth sites. Following the news Hims shares increased by over 40 percent in the morning, when Novo stock increased by 2.1 percent in the Copenhagen listings. Pape Stoxx 600 in Europe lost 1% and S&P 500 lost 0.6%.
Novo Nordisk Drops Lawsuit Against Hims & Hers
In February, Novo Nordisk said it would sue Hims due to what it termed as mass illegal compounding. Hims planned to market a generic version of the Wegovy pill for $49, about $100 less than the branded drug Novo sells through its NovoCare platform.
Hims subsequently recalled the pill when they received opposition both from Novo and the U.S. Food and Drug Administration. The FDA made a commitment to crack down on those compounding pharmacies, which contravene the regulations.
Hims was also referred to the Department of Justice by the agency on the possibility of the violation of federal laws. The regulators cautioned that patient safety might be at risk because the unapproved compounded drugs might be harmful to patients.
The agreement between the companies was welcomed by the FDA Commissioner Marty Makary. He explained that the move would make sure Hims markets FDA-approved medicines instead of marketing the unapproved compounded products. Notably, they will maintain them affordable and only use rare FDA-compliant cases to use compounded GLP-1s, Makary wrote in a post on X.
Regulatory Pressure on Compounded Weight-Loss Drugs
Hims made the most money by taking advantage of a regulatory loophole to sell knockoffs of a well-known weight-loss drug, as the United States law allowed a non-patent owner company to offer a compounded version of a medicine in case the original drug was out of stock.
Semaglutide initially had low supply. Novo Nordisk has since increased its production and has to a great extent rectified those shortages. Hims continued to sell compounded versions even after supply was no longer an issue. The company reported that its formula was tailor-made to every patient, and therefore, the formulas were legal. The U.S. patent of semaglutide expires in 2032, which will provide Novo Nordisk with a long-term control over the branded drug.
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Growing Demand in the Weight-Loss Drug Market
 Novo and Hims momentarily collaborated in the past year to provide telehealth patients with discounted weight-loss injections. The partnership was terminated two months later due to claims of misleading marketing by Novo against Hims.
Novo CEO Mike Doustdar claimed the new structure is actually quite different to the former partnership. He described that Hims has decided to cease marketing compounded drugs to a wide range of people. Instead, doctors will prescribe compounded versions only in rare medical cases when they are truly necessary.
Doustdar further indicated that Wegovy pill has over 600,000 prescriptions in the hands of Novo now. The prescription of the drug has remained high, despite previous worries about the potential of the drug to have adverse effects on diet. Doustdar indicated that patients are so interested due to its efficiency.
According to Hims, current patients using compounded semaglutide may transition to FDA-approved medicines. Their healthcare providers will decide if the change is clinically appropriate.
Hims CEO Andrew Dudum told the press that the market of anti-obesity drugs is changing at a high rate. According to him, patient choices are growing due to new therapies that are more affordable, more personalized and are in new forms.
The company is also in discussions with biotech firms and major pharmaceutical companies. It aims to introduce new treatments to its platform.
Meanwhile, Eli Lilly, the manufacturer of Zepbound, plans to launch a rival weight-loss pill called orforglipron in the second quarter. The launch will depend on FDA approval.
