Novo Nordisk has reached a cooperation agreement with U.S. digital health company Hims & Hers Health Inc., ending a patent dispute that lasted for several months.

According to a Bloomberg report, Novo Nordisk announced on Monday that it will sell its blockbuster products Ozempic and Wegovy, including the popular Wegovy oral tablets, to U.S. consumers through the Hims platform. Concurrently, the company is withdrawing the patent infringement lawsuit it filed last month. In exchange, Hims has committed to halting the promotion of its compounded GLP-1 copycat drugs and will only provide compounded formulations when deemed clinically necessary by a physician.

Following the announcement, Hims & Hers Health Inc. stock surged over 49% during the trading session, marking its largest single-day gain on record. Novo Nordisk A/S shares in Copenhagen also rose more than 2%.

The agreement was described on social media platform X as "a victory for the American people." It was stated that congratulations were offered to both parties for reaching the agreement, while emphasizing that Hims will cease promoting unapproved compounded drugs and restrict the use of compounded GLP-1 drugs to special circumstances that comply with regulations.

From Litigation to Handshake: Key Terms of the Agreement Under the agreement, the Hims platform will offer Ozempic and Wegovy injectables, as well as Wegovy oral tablets, to U.S. consumers at Novo Nordisk's cash-pay prices. Novo Nordisk had previously significantly reduced the monthly cost of its weight-loss drugs from approximately $1,000 to a range of $149 to $299.

The CEO of Novo Nordisk stated that pricing was central to this collaboration, noting that "the price of the authentic drug is now very close to that of compounded formulations." He revealed that the Wegovy oral tablet, launched two months ago, has already generated over 600,000 prescriptions, and that partnerships with digital health platforms are accelerating its adoption.

Hims will phase out external marketing for its compounded weight-loss products over the coming weeks and will provide patients with new product options. The CEO of Hims described the collaboration as reflecting the strategic shift of the company's U.S. weight-loss business from compounded GLP-1 drugs to FDA-approved branded products, stating, "This is the direction where we see the business growing."

Novo Nordisk stated that while it is withdrawing the lawsuit, it retains the right to re-file litigation.

Origin of the Dispute: Nine Months of Opposition and Legal Conflict This collaboration is not the first attempt between Novo Nordisk and Hims. According to Bloomberg, the two parties had previously reached an agreement, but Novo Nordisk unilaterally terminated it last June, citing Hims' use of "deceptive marketing" and accusing it of failing to effectively curb the large-scale promotion of copycat weight-loss drugs.

Hims countered immediately, calling Novo Nordisk's claims misleading. The Hims CEO stated at the time that compromise on the matter was "absolutely impossible" and accused the other party of making "highly inappropriate" demands. The collapse of the partnership put pressure on Hims' stock price and cast a shadow over the prospects of its weight-loss drug business.

In February of this year, Novo Nordisk filed a lawsuit against Hims, citing its launch of a copycat version of the Wegovy oral tablet. Even though Hims quickly removed the product from the market under regulatory pressure, the lawsuit was not withdrawn. That same month, regulatory authorities announced they would take strong action against companies engaged in the large-scale promotion of illegal copycat drugs, with Hims being named among them.

Regulatory Pressure as a Key Background Factor for the Settlement This settlement comes at a time of noticeably tightening regulatory scrutiny. Just one week before the agreement was reached, warning letters were issued to 30 digital health companies, citing misleading promotion of compounded GLP-1 drugs, with some firms conflating compounded products with approved medications.

According to Bloomberg, a U.S. government department had referred Hims to the Department of Justice in February for investigation under criminal provisions of relevant law. Hims disclosed in its annual report last month that it had received a letter from the Securities and Exchange Commission requesting the preservation of documents and information related to statements about compounded Novo Nordisk drugs and business relationships.

Market Competition: Dual Pressures on Novo Nordisk This collaboration highlights the dual challenges Novo Nordisk faces in the U.S. market. On one hand, the battle for market share in weight-loss drugs with Eli Lilly is intensifying, with Novo Nordisk's stock price down approximately 23% year-to-date. On the other hand, digital health companies like Hims are continuing to erode its market share by selling lower-priced compounded formulations.

The Hims platform boasts over 2.5 million subscribers and was one of dozens of digital health companies that entered the compounded drug market during the shortage of Novo Nordisk's injectable weight-loss drugs. After the supply shortage ended, these companies were expected to stop selling precise copies. However, some firms continued to operate by adjusting dosages or adding ingredients, allowing their products to be classified under regulations as distinct from the branded drugs.

The CEO of Novo Nordisk was personally involved in the negotiations. He stated that, learning from the previous collaboration's failure, both sides invested more time on the details, suggesting that "everyone has become more mature."