Telehealth giant Hims & Hers Health, Inc. (NYSE:HIMS) may have flown too close to the sun and is now under fire on multiple fronts, including federal intervention, criminal investigation and a patent war.

Shares of Hims & Hers crashed to new 52-week lows on Monday, under the weight of much uncertainty. 

• HIMS stock is dropping. See the chart and price action here. 

Federal Crackdown: FDA & DOJ

One catalyst for the crash was Hims’ recent aggressive attempt to launch a compounded oral semaglutide pill — a copycat of Novo Nordisk A/S’s (NYSE:NVO) newly approved oral Wegovy. 

The response from Washington was swift and severe:

• FDA Intervention: Last Friday, the FDA announced “decisive steps” to restrict compounding pharmacies from mass-marketing GLP-1 ingredients. Commissioner Marty Makary explicitly warned against illegal copycat drugs that have not undergone the agency’s gold-standard review.
• DOJ Referral: The Department of Health and Human Services (HHS) General Counsel referred Hims & Hers to the Department of Justice for potential violations of the Food, Drug and Cosmetic Act.

Under regulatory pressure, Hims & Hers did a U-turn on Saturday and announced it would stop offering the oral pill just 48 hours after its launch.

The Patent War: Novo Nordisk Strikes

Another legal battle began Monday morning when Novo Nordisk stated it had filed a major patent infringement lawsuit against Hims & Hers.

• The Allegation: Novo claims Hims & Hers is infringing on U.S. Patent 8,129,343, which protects semaglutide through 2032.
• The Scope: Unlike the FDA crackdown, which focused on the new oral pill, Novo's lawsuit targets Hims' entire GLP-1 business, including its widely sold injectable compounded semaglutide.
• The Risk: Novo is seeking a permanent injunction. If successful, the lawsuit could wipe out a segment estimated to represent $800 million in projected 2025 revenue for Hims & Hers.

Market Impact: Stock at a Crossroads

Investors are pricing in a structural blow to Hims & Hers' growth thesis.

• Revenue at Risk: Multiple analysts slashed price targets on HIMS and analysts at Leerink Partners noted that weight loss accounts for roughly 25% to 30% of the company’s EBITDA.
• Technical Breakdown: The stock has lost over 40% of its value in a matter of days. While the company remains profitable in other segments (hair loss, sexual health), the legal overhang has made HIMS a high-risk stock.

Hims & Hers is fighting for its legal right to sell its most lucrative new product line. The uncertainty has investors dumping HIMS at very high volume, with more than four times the stock’s average volume changing hands before noon on Monday. 

HIMS Price Action: According to data from Benzinga Pro, Hims & Hers Health shares were down 20.10% at $18.39 at the time of publication on Monday.

Photo: Shutterstock

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