Shares of Hims & Hers Health Inc. (HIMS) plummeted 5.19% in pre-market trading on Wednesday, following a substantial 23% surge the previous day. The volatility comes as investors reassess the impact of the company's recently announced partnership with Novo Nordisk to sell branded versions of the obesity drug Wegovy.

On Tuesday, Novo Nordisk revealed collaborations with telehealth providers, including Hims & Hers, to distribute Wegovy through their platforms. This move was initially seen as a positive development for Hims & Hers, potentially expanding its reach in the lucrative weight-loss drug market. However, the sharp decline suggests that investors may be taking profits and reconsidering the long-term implications of the partnership.

Market analysts point out that while the Wegovy deal is a significant opportunity for Hims & Hers, the company faces intense competition in the obesity drug market. Eli Lilly's Zepbound has been gaining market share rapidly, and there are concerns about Novo Nordisk's ability to maintain its leading position. This competitive landscape could limit the potential upside for Hims & Hers, despite its new partnership. As the market digests these factors, HIMS stock may continue to experience volatility in the short term.