FDA warns of "swift action," HIMS weight-loss drug generic plan frustrated, stock price drops nearly 6%

FDA warns of "swift action," HIMS weight-loss drug generic plan frustrated, stock price drops nearly 6%

Marty Makary, Commissioner of the U.S. Food and Drug Administration (FDA), publicly stated Thursday night that the agency would take swift regulatory action against mass-marketing “unapproved generic drugs.” This statement directly impacted telemedicine company Hims & Hers Health, whose stock price fell in response.

Makary emphasized on social media platform X that the FDA “cannot verify the quality, safety, or efficacy of unapproved drugs.” This statement coincided with Hims & Hers Health’s launch of a $49-per-month generic oral Wegovy weight loss drug, priced at only a third of Novo Nordisk’s original monthly cost. As a result, Hims shares fell 5.7% during Friday’s U.S. market session.

This regulatory move comes as Novo Nordisk faces mounting pressure. The company’s stock plummeted 20% this week, first due to full-year revenue guidance significantly below market expectations and then facing the threat of competition from Hims’ low-priced generics. Despite a slight rebound Friday, its shares are set for the worst weekly performance in nearly six months.

For investors, this marks the GLP-1 weight loss drug market entering a critical stage of competition. Goldman Sachs analyst James Quigley previously pointed out that the 2026 fiscal year will be a “reset year” for GLP-1 market pricing, and the FDA’s rapid intervention further shows a regulatory tilt toward protecting original drug manufacturers’ interests.

Regulatory Pushback Triggered by Generic Competition

Hims & Hers Health announced Thursday the launch of a $49-per-month GLP-1 oral weight loss medication, priced at only a third of Novo Nordisk’s Wegovy. This move is seen as a key signal that GLP-1 market competition is entering a price war phase, with the company aiming to rapidly seize market share using a low-price strategy.

Novo Nordisk responded promptly, stating it would take legal and regulatory action. In fact, their partnership was terminated as early as June last year, when Novo Nordisk accused Hims of “illegal large-scale compounding and misleading marketing practices.”

J.P. Morgan analyst Richard Vosser pointed out in a research report that Novo Nordisk has sufficient legal grounds to demand the product be removed from the market, and believes Hims' generic drugs “clearly violate U.S. pharmaceutical regulations.”

Novo Nordisk's Market Value Evaporates by $460 Billion

Since reaching a market cap peak of $659 billion in June 2024, Novo Nordisk’s value has evaporated by more than $460 billion, now only slightly above $200 billion. Once the largest listed company in Europe, it has swiftly dropped out of the global top ten by market capitalization.

This week’s stock slump is just the latest sign of a string of challenges for the company. Throughout 2025, Novo Nordisk recorded its worst annual stock performance ever, mainly due to intensified competition in the obesity drug market, clinical trial data falling short of expectations, and multiple earnings warnings. Its stock trend has almost erased all gains made during the “weight loss drug boom.”

Mizuho health analyst Jared Holz commented:

“It’s clear that if Novo Nordisk had never entered the obesity treatment market, its current stock price would be higher.”

Novo Nordisk CEO Mike Doustdar admitted at an analyst meeting on Thursday:

“The past year has made us realize that the dynamic changes in the obesity drug market far exceed our previous understanding and expectations.”

Competitive Pressures Continue to Intensify

Novo Nordisk initially was a small manufacturer focused on insulin. The turning point came when its diabetes treatment Ozempic (semaglutide injection) attracted attention among Hollywood celebrities. The company then redeveloped the same active ingredient for weight loss, resulting in Wegovy, which received U.S. regulatory approval in June 2021 and triggered a rapid stock price rise.

However, despite first-mover advantage, Novo Nordisk underestimated the intensity and speed of market competition. The company faces persistent pressure from major U.S. rival Eli Lilly, which launched the weight loss drug Zepbound at the end of 2023. Both companies are also under pressure from low-cost generics flooding the market.

CEO Doustdar admitted:

“Price is undoubtedly a key factor affecting business scale, and we have clearly seen this from the market penetration of compounding pharmacies. Consumers choose generic drugs not out of preference, but because of pressure from original drug prices. We did not fully anticipate the speed and breadth of their market coverage.”

In January this year, the launch of Wegovy’s oral version briefly gave Novo Nordisk a temporary advantage, driving its stock to the biggest gain in five months. But subsequent disappointing sales forecasts and the launch of Hims' low-priced generics again weighed on its share price.

Currently, among the 34 analysts tracked by Bloomberg, less than half recommend a “buy” or equivalent rating. Even the most optimistic analysts believe the stock is unlikely to return to historical highs within the next 12 months.

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