COPENHAGEN, Feb 9 - Novo Nordisk’s shares listed in Frankfurt rose 4.5% on Monday after telehealth provider Hims & Hers reversed course and withdrew a $49 compounded weight-loss treatment it had launched the previous week.
Hims introduced the product on Thursday, marketing it as a formulation based on semaglutide - the active ingredient present in Novo Nordisk’s high-selling drugs Wegovy and Ozempic. The Danish drugmaker and U.S. regulators pushed back, and after what Hims described as "constructive conversations with stakeholders," the telehealth firm announced on Saturday that it would cease offering the treatment.
The stock boost on Monday followed an earlier rebound of more than 5% on Friday, when comments from U.S. Food and Drug Administration Commissioner Marty Makary suggested a tighter regulatory stance on unauthorized compounded GLP-1 medications. These compounded alternatives have eroded some of Novo Nordisk’s pricing power in the weight-loss and diabetes markets.
Even with the recent uptick in share price, Novo Nordisk remains under substantial pressure. The company has been contending with competition from Eli Lilly as well as with lower-priced compounded substitutes. In its full-year earnings released last week, Novo warned of "unprecedented price pressure," a disclosure that coincided with a 17% plunge in its stock.
Market value metrics indicate a substantial decline from the company’s peak - Novo Nordisk’s market capitalization reached its high in June 2024 and has subsequently dropped by nearly two-thirds.
The article also referenced market tools aimed at assessing rival valuations, noting inquiries over whether Eli Lilly (ticker LLY) represents a buying opportunity and citing a fair value calculator that uses a combination of 17 valuation models to evaluate stocks.
Context and implications
The immediate market reaction reflected investor relief that an easily accessible, low-cost compounded semaglutide offering would not remain on the market following pressures from both the manufacturer and federal regulators. However, the longer-term competitive and pricing dynamics that Novo outlined in its earnings report remain unresolved.