Hims & Hers Health Inc. (HIMS) experienced a volatile trading session on Tuesday, with its stock soaring 5.72% after a dramatic 35% plunge the previous day. The turbulence comes in the wake of Danish pharmaceutical giant Novo Nordisk's decision to terminate its collaboration with Hims & Hers for the sale of weight loss drugs, including the popular Wegovy.

The partnership, which began in April, ended abruptly due to what Novo Nordisk described as "deceptive promotion and selling of illegitimate, knockoff versions of Wegovy that put patient safety at risk." In response, Hims & Hers CEO Andrew Dudum countered these claims, stating that Novo Nordisk was "misleading the public" and had pressured his company to "control clinical standards and steer patients to Wegovy regardless of whether it was clinically best for patients."

The market's reaction to this news was initially severe, with HIMS stock plummeting 35% during Monday's regular trading session. However, the stock showed signs of recovery in after-hours trading on Monday and continued its rebound on Tuesday. This suggests that investors may be reassessing the impact of the partnership dissolution on Hims & Hers' business model. The company's commitment to maintaining a diverse range of treatment options, including compounded medications, could be viewed positively by some market participants.

Adding to the stock's volatility, Needham downgraded Hims & Hers from Buy to Hold following the Novo Nordisk fallout. Despite these challenges, the stock's resilience on Tuesday indicates that some investors see potential in the company's ability to navigate this setback and continue serving its customer base with a variety of treatment options.