Novo Nordisk has dropped its legal proceedings against the telemedicine provider Him and him for patent infringement after the two companies agreed that Hims would sell Novo’s branded drugs through its platform.
“We have decided to halt the ongoing litigation and of course reserve the right to reopen it if necessary, but I do not expect that to happen,” Novo Nordisk CEO Mike Doustdar told CNBC’s Charlotte Reed on Monday.
Under the agreement, Hims will offer access to injectable and oral semaglutide, sold as Ozempic and Wegovy, at the same price as other telehealth platforms, and Hims will no longer promote compounded GLP-1 drugs on its platform or in its marketing, the companies said in statements Monday.
Shares in Hims rose more than 40% in morning trading, while Copenhagen-listed shares in Novo rose 2.1%. The pan-European blue chip index Stoxx 600 was trading 1% lower while the S&P 500 fell 0.6%.
In February, Novo announced it would sue Hims for “mass illegal compounding” after the latter announced it would sell a copycat version of the Wegovy pill for $49, about $100 less than Novo sells the branded pill through its direct-to-consumer platform NovoCare.
After backlash from Novo and the U.S. Food and Drug Administration, Hims quickly went off the pill. The FDA vowed to take “decisive steps” to restrict the practice by clamping down on pharmacies and referring Hims to the Justice Department for possible violations of federal law.
FDA Commissioner Marty Makary said he was pleased to see that as part of the deal with Novo, Hims would stop promoting unapproved compounded drugs and instead sell FDA-approved products.
“Importantly, they keep them affordable (no price increase) and limit compounded GLP-1s for rare (FDA compliant) cases,” Makary wrote in a post on X.
Hims has benefited enormously from selling copycat versions of the blockbuster weight-loss drug through a loophole in U.S. regulations that allows companies other than the patent holder to sell a drug when it is in short supply.
While semaglutide was in short supply in the drug’s early days, Novo has since resolved supply shortages and ramped up production. However, Hims continued to sell copycat versions of the drugs, arguing that the copies were “personalized” and therefore legal.
Semaglutide is patent protected in the US until 2032.
Last year, Novo and Hims teamed up to offer discounted weight loss vaccinations to the telehealth company’s customers. Novo ended the collaboration just two months later, saying Hims engaged in “misleading” marketing that jeopardized patient safety.
“It’s a very different situation than last time,” Doustdar told CNBC.
“Hims & Hers has agreed that upon receipt of our products, they will no longer advertise or market composite products to the general public,” he said, adding that Hims has now agreed to change its business model to reserve the composite versions “only for the rare occasions when they are needed.”
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Novo Nordisk ADRs and Hims shares were volatile.
Novo now has more than 600,000 Wegovy pill scripts, Doustdar said.
Doustdar acknowledged that at the time of the Wegovy pill’s launch in January, there were question marks, “a little fueled by our competitor,” that certain food restrictions might limit the pill’s use.
“Well, I have news for you: That was absolutely not the case,” he said. “People are really interested because it’s the most effective pill on the market right now.”
Hims’ existing patients compounding semaglutide “will have the opportunity to switch to FDA-approved medications if their providers deem it clinically appropriate,” Hims said in a statement.
Speaking to CNBC’s Brandon Gomez, Hims CEO Andrew Dudum highlighted the rapidly changing landscape for obesity medications.
“Demand will continue to increase with the new range coming to market and the range really meets needs in terms of affordability, personalization and form factor that did not exist in the past, even just six months ago and 12 months ago,” he said.
Hims is also in discussions with anyone who can bring new therapies to the platform, he added, “be it existing biotech companies or existing large pharma companies.”
Zepbound manufacturer Eli Lilly is expected to launch a competing weight loss pill called orforglipron in the second quarter, pending FDA approval.
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