Hims shares plunge after FDA threatens action on 'illegal copycat drugs'

By Carlos Méndez and Chris Thomas

Feb 5 (Reuters) - The U.S. Food and Drug Administration (FDA) will take swift action against companies that mass-market "illegal copycat drugs" by claiming they are similar to FDA-approved products, its commissioner, Marty Makary, said on Thursday.

The comments came after online telehealth company Hims and Hers Health HIMS.N began offering a much cheaper $49 compounded version of Novo Nordisk's NOVOb.CO new Wegovy weight-loss pill.

Hims stock, which closed down 3.8% on Thursday, plunged 10% in after-hours trading after Makary's comment. The launch of its cheap pill had earlier sparked a selloff in shares of Danish drugmaker Novo and Eli Lilly LLY.N.

Hims' compounded drug is not FDA-approved and has not gone through clinical trials to prove efficacy.

Compounding, in which pharmacies mix ingredients for specialized medicines or to copy a drug but at different dosages, has flourished as Americans chase cheaper prices for drugs.

"The FDA cannot verify the quality, safety, or effectiveness of non-approved drugs," Makary said in a post on social media platform X, without naming Hims.

The FDA did not immediately respond to a request for further details.

Hims and Lilly did not respond to Reuters' requests for comment on Makary's statement.

In an emailed response to Reuters after Makary’s comments, Novo said it was working with regulators, law enforcement and other stakeholders.

These efforts aim to "ensure patients have affordable access to safe, effective, and FDA‑approved GLP‑1 obesity medication and to protect patients from unapproved knockoff drugs," it added.

A Hims spokesperson said the company had not compromised on safety or efficacy and used a technology based on liposomes intended to support absorption.

But Novo, which has seen strong demand in the United States for its weight-loss pill launched last month, said Hims' mass compounding was illegal and it would take legal action to protect its intellectual property.

Its CEO, Mike Doustdar, called the Hims' pill a waste of money, saying its own pill uses unique technology aiding in the absorption of the medicine.

BITTER PILL

Novo launched its pill in January priced at $149 for first-time users and $199 after that. Hims is pricing its drug at $49 for the first month and $99 afterwards for buyers of a five-month plan.

Lilly, which is expected to launch its pill in April, a prospect that has weighed on Novo's stock, has promised affordable pricing on the U.S. government's TrumpRx site. Lilly shares rose 1.6% after hours on Thursday.

Some analysts said Lilly's pill, an experimental GLP-1, could be a next target for compounded copies.

Last year, Novo and Hims walked away from a partnership that allowed the telehealth company to offer injectable Wegovy.

Novo said Hims had wrongfully marketed versions of its medicine, while Hims accused Novo of attempting to control how its clinicians make decisions.

Hims has been tussling with Novo since the FDA a allowed it in 2023 to sell versions of Novo's GLP-1 injectable drugs while the branded medicines were in short supply.

Since then, it has made "personalized" copies of the branded drugs in doses or regiments different from those of Novo and other drug companies.

In September, the FDA warned Hims that its marketing of compounded semaglutide was misleading, citing claims such as "same active ingredient as Ozempic and Wegovy."