On Monday, $HIMS was vaguely accused of using “illicit” Chinese...
Misunderstood Multibaggers@meeijer
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Jun 28, 2025
~4 min read
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On Monday, $HIMS was vaguely accused of using “illicit” Chinese ingredients. Here's my whole take on the “fallout” between $HIMS and $NVO:
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Two months ago, $HIMS announced a long-term collaboration with Novo Nordisk aimed at making proven obesity care and treatments more accessible and affordable.
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Ironically, $NVO has now said it terminated its "long-term" partnership with $HIMS, citing concerns about "$HIMS’ illegal mass compounding and deceptive marketing." This announcement wiped out 35% of $HIMS’ market cap, primarily because the agreement was expected to be long-term and the perceived risk of legal action against $HIMS suddenly increased.
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$NVO further stated that its investigation found the "semaglutide" active pharmaceutical ingredients that are in the knock-off drugs sold by telehealth entities and compounding pharmacies are manufactured by foreign suppliers in China.
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According to $NVO: The report also found that a "large share of these Chinese suppliers were never inspected by FDA, and many of those that were (inspected) had drug quality assurance violations. US patients should not be exposed to knock-off drugs made with unsafe and illicit foreign ingredients."
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Shortly after this news broke, Andrew Dudum, CEO of $HIMS, responded:
We are disappointed to see Novo Nordisk management misleading the public.
In recent weeks, Novo Nordisk’s commercial team increasingly pressured us to control clinical standards and steer patients to Wegovy regardless of whether it was clinically best for patients. We refuse to be strong-armed by any pharmaceutical company’s anticompetitive demands that infringe on the independent decision making of providers and limit patient choice.
We take our role of protecting the ability of providers and patients to control individual treatment decisions extremely seriously, and will not compromise the integrity of our platform to appease a third party or preserve a collaboration. The health and wellness of individuals always comes first.
We will continue to offer access to a range of treatments, including Wegovy, to ensure providers can serve the individual needs of patients.
We are disappointed to see Novo Nordisk management misleading the public.
In recent weeks, Novo Nordisk’s commercial team increasingly pressured us to control clinical standards and steer patients to Wegovy regardless of whether it was clinically best for patients. We refuse to be strong-armed by any pharmaceutical company’s anticompetitive demands that infringe on the independent decision making of providers and limit patient choice.
We take our role of protecting the ability of providers and patients to control individual treatment decisions extremely seriously, and will not compromise the integrity of our platform to appease a third party or preserve a collaboration. The health and wellness of individuals always comes first.
We will continue to offer access to a range of treatments, including Wegovy, to ensure providers can serve the individual needs of patients.
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My opinion:
If $NVO’s allegations prove accurate, $HIMS could face serious backlash and legal risk, including a potential fine. However, as of now, no concrete evidence has been presented.
That said, $HIMS remains a strong business with huge potential and an outstanding leadership team.
Yes, continuing to offer personalized semaglutide is risky or better said may be risky; but sometimes, moving fast and pushing boundaries is what it takes to stay ahead.
If $NVO’s allegations prove accurate, $HIMS could face serious backlash and legal risk, including a potential fine. However, as of now, no concrete evidence has been presented.
That said, $HIMS remains a strong business with huge potential and an outstanding leadership team.
Yes, continuing to offer personalized semaglutide is risky or better said may be risky; but sometimes, moving fast and pushing boundaries is what it takes to stay ahead.
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Currently, $HIMS offers personalized semaglutide under Section 503A, which permits licensed pharmacists or physicians to compound medications for individual patients when commercially available drugs do not meet their medical needs. It’s intended for cases like allergies, specific dosage requirements, or alternative delivery forms. Under this section, compounded drugs are exempt from certain FDA requirements, provided they’re dispensed in a patient-specific manner.
Because of Section 503A, $HIMS can sell compounded semaglutide at significantly lower prices than branded options; frustrating traditional pharmaceutical companies.
Because of Section 503A, $HIMS can sell compounded semaglutide at significantly lower prices than branded options; frustrating traditional pharmaceutical companies.
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But why did this “conflict” happen in the first place?
I believe $HIMS saw the partnership as a branding opportunity and a way to legitimize its approach to personalized medicine.
On the other hand, $NVO likely saw it as a strategic move to increase revenue and curb $HIMS’ ability to sell compounded semaglutide.
I believe $HIMS saw the partnership as a branding opportunity and a way to legitimize its approach to personalized medicine.
On the other hand, $NVO likely saw it as a strategic move to increase revenue and curb $HIMS’ ability to sell compounded semaglutide.
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Will $HIMS face a lawsuit?
While sentiment on X has turned bearish and a lot of people think $NVO will sue $HIMS, I believe the likelihood of a lawsuit is low. Here’s why:
While sentiment on X has turned bearish and a lot of people think $NVO will sue $HIMS, I believe the likelihood of a lawsuit is low. Here’s why:
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1) Backfire
If $NVO sues and loses, it could set a precedent that validates $HIMS' business model under Section 503A. That would not only legitimize $HIMS but also encourage other telehealth companies to follow suit, making the problem bigger for $NVO. The lawsuit could end up hurting $NVO more than helping.
If $NVO sues and loses, it could set a precedent that validates $HIMS' business model under Section 503A. That would not only legitimize $HIMS but also encourage other telehealth companies to follow suit, making the problem bigger for $NVO. The lawsuit could end up hurting $NVO more than helping.
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2) Poor return
Even if $NVO wins, the reward may not justify the cost. $HIMS generates only a few hundred million from personalized semaglutide, small compared to $NVO’s billions. The legal battle would be expensive, time-consuming, and likely not worth the limited potential compensation.
Even if $NVO wins, the reward may not justify the cost. $HIMS generates only a few hundred million from personalized semaglutide, small compared to $NVO’s billions. The legal battle would be expensive, time-consuming, and likely not worth the limited potential compensation.
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3) Hard to prove
The decision whether a patients has to receive a personalized drug isn’t made by $HIMS. It’s done by a ton of independent doctors. This makes it utterly hard for $NVO to claim that $HIMS is responsible.
The decision whether a patients has to receive a personalized drug isn’t made by $HIMS. It’s done by a ton of independent doctors. This makes it utterly hard for $NVO to claim that $HIMS is responsible.
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Could a lawsuit still happen? Sure. But based on current facts, I think it’s unlikely. $HIMS remains a solid company with real potential, and I still believe a $100 share price by year-end is still doable.
Thanks for reading!
Thanks for reading!