Hims & Hers Shares Plummet Amid Regulatory and Legal Onslaught

The telehealth company Hims & Hers Health is confronting what may be its most severe challenge to date. A dual assault from U.S. regulators and a pharmaceutical titan has sent its equity into a steep decline, threatening to dismantle its lucrative business in customized weight-loss injections.

Investor sentiment soured dramatically following an announcement from the U.S. Food and Drug Administration (FDA). The agency pledged to take "decisive action" against compounded drug products containing GLP-1 class active ingredients. In a move that particularly rattled the market, the FDA's statement explicitly named Hims & Hers and referred the matter to the U.S. Department of Justice (DOJ) for a potential investigation into federal law violations.

The regulatory body emphasized that companies cannot claim these unapproved, pharmacy-mixed products are generic versions or contain precisely the same active ingredients as their approved counterparts. The corporate response was swift: Hims & Hers withdrew a new $49 semaglutid tablet from the market merely one day after its launch.

Simultaneously, pharmaceutical giant Novo Nordisk opened a second front by filing a patent infringement lawsuit on Monday. This marks an escalation in the Danish Wegovy manufacturer's strategy, which had previously focused on combating trademark violations and misleading advertising by smaller pharmacies. Legal analysts view this action as a high-risk development for Hims & Hers, given that patent litigation is often protracted and can result in substantial damage awards. Novo Nordisk has already alluded to seeking a "very significant sum."

In an official statement, Hims & Hers characterized the lawsuit as a "targeted attack on millions of Americans" who rely on access to personalized medicine.

Should investors sell immediately? Or is it worth buying Hims & Hers?

The Compounding Loophole Closes

This regulatory and legal tightening coincides with the official end of the semaglutide shortage designation in February 2025. While the drug was listed in short supply, compounding pharmacies were permitted to legally produce copies. The removal of this status eliminates that protective shield, granting Novo Nordisk a clearer path for aggressive legal enforcement.

The market reaction was severe. Shares plunged as much as 27 percent intraday, hitting a new 52-week low of $16.35?a stark contrast to its peak near $73. Trading volume exploded to over 144 million shares, a multiple of the average daily volume. Investors are now anxiously awaiting the company's quarterly earnings report on February 23, 2026, anticipating crucial commentary on the future viability of its business model.

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