Telehealth provider Hims & Hers Health is navigating a period of significant pressure from two major fronts. The company’s stock has declined sharply, losing nearly 48% of its value since mid-January, following a one-two punch of regulatory scrutiny and a high-profile patent lawsuit.
Legal Action from a Pharmaceutical Giant
Adding to the regulatory pressure, Danish pharmaceutical leader Novo Nordisk filed a patent infringement lawsuit on February 9. This legal action, described as the first of its kind in the United States targeting a compounder of medications related to the blockbuster drug Wegovy, forced Hims & Hers to withdraw its newly launched alternative from the market immediately.
The company responded forcefully, calling the lawsuit a “brazen attack by a Danish corporation on millions of Americans who rely on personalized medicine.” Legal counsel for Novo Nordisk indicated the potential for “very substantial” damages.
FDA Targets Marketing of Compounded Drugs
The U.S. Food and Drug Administration (FDA) has announced a crackdown on so-called GLP-1 agonist ingredients within compounded drugs, explicitly naming Hims & Hers in its communications. The agency alleges the firm has been marketing unapproved preparations as alternatives to officially sanctioned weight-loss medications.
This move came just days after the company launched a low-cost $49 weight management pill. The FDA also criticized what it termed “misleading direct-to-consumer advertising,” clarifying that compounded products cannot be promoted as generic versions or equivalents to FDA-approved drugs.
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Analysts Adjust Price Targets Amid Uncertainty
Market analysts have revised their outlooks in response to these developments. On February 9, TD Cowen maintained its Hold rating but slashed its price target from $30 to $20. The following day, Deutsche Bank reduced its target from $42 to $31. The current average analyst price target sits near $30, which remains well above the stock’s recent trading level of $16.04.
Notably, a significant 36.46% of the company’s float is held in short positions, indicating many investors are betting on further share price declines.
Robust Growth Meets a Clouded Future
Despite the current challenges, Hims & Hers has demonstrated strong operational performance. For the third quarter of 2025, revenue surged 49% to approximately $599 million, while its subscriber base grew to nearly 2.5 million. The market awaits the company’s fourth-quarter results, scheduled for release on February 23.
The central question now facing investors is whether the company can sustain its business model around compounded GLP-1 medications, or if the combined force of FDA regulation and the Novo Nordisk lawsuit will fundamentally impair its growth trajectory.
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