Hims & Hers Health Inc. (HIMS) saw its stock price plummet 5.41% during intraday trading on Thursday. The sharp decline extends recent losses for the telehealth company.

The sell-off is directly linked to regulatory pressure from the U.S. Food and Drug Administration (FDA) regarding compounded versions of weight-loss drugs. The decline follows the company's announcement that it would sell a cheaper version of Novo Nordisk's Wegovy. The FDA responded by stating it would take enforcement action against such compounded versions, noting that shortages of GLP-1 drugs have ended, meaning companies should have ceased offering them.

Novo Nordisk called Hims & Hers' move illegal and pledged legal and regulatory action to protect patients. The FDA also signaled further measures against direct-to-consumer advertising, having previously issued warning letters to the company. Hims & Hers stated it has been operating in compliance with applicable law and looks forward to continued engagement with the FDA.