FDA warns of "swift action," HIMS weight loss drug generic plan thwarted, stock price falls nearly 6%

Marty Makary, the director of the U.S. Food and Drug Administration (FDA), publicly stated on Thursday evening that the agency will take swift regulatory action against the large-scale marketing of "unapproved generic drugs." This statement directly impacted the telemedicine company Hims & Hers Health, causing its stock price to drop.

Makary emphasized on the social media platform X that the FDA "cannot verify the quality, safety, or efficacy of unapproved drugs." This statement coincided with Hims & Hers Health launching a generic version of the oral weight loss drug Wegovy at a monthly price of $49, which is only one-third of the monthly fee for the original drug from Novo Nordisk. As a result, Hims' stock price fell by 5.7% during Friday's trading session.

This regulatory dynamic comes at a time when Novo Nordisk is facing multiple pressures. The company's stock price has plummeted by 20% this week, first due to a full-year revenue guidance significantly below market expectations, and then facing competitive threats from Hims' low-priced generic drugs. Although there was a slight rebound on Friday, its stock price is still set to record its worst weekly performance in nearly six months.

For investors, this marks a critical stage in the competition within the GLP-1 weight loss drug market. Goldman Sachs analyst James Quigley previously pointed out that the fiscal year 2026 will be a "reset year" for GLP-1 market pricing, and the FDA's rapid intervention further indicates that regulatory attitudes are shifting towards protecting the rights of original drug companies.

Regulatory Counterattack Triggered by Generic Drug Impact

Hims & Hers Health announced on Thursday the launch of a GLP-1 oral weight loss drug priced at $49 per month, which is only one-third of the price of Novo Nordisk's Wegovy equivalent. This move is seen as an important signal that competition in the GLP-1 market has entered a price war phase, with the company aiming to quickly capture market share through a low-price strategy.

Novo Nordisk immediately stated that it would respond with legal and regulatory measures. In fact, the partnership between the two companies was terminated last June, when Novo Nordisk accused Hims of "illegal large-scale compounding and misleading marketing practices."

J.P. Morgan analyst Richard Vosser noted in a research report that Novo Nordisk has sufficient legal grounds to demand the removal of the product and believes that Hims' generic drug "clearly violates U.S. drug regulatory regulations."

Novo Nordisk's Market Value Eroded by $460 Billion

Since reaching a market value peak of $659 billion in June 2024, Novo Nordisk has seen its market value erode by over $460 billion, currently standing just above $200 billion. This once top European company by market value has quickly fallen out of the top ten global publicly traded companies by market value This week's sharp decline in stock prices is just the latest manifestation of the company's ongoing struggles. Throughout 2025, Novo Nordisk recorded its worst annual stock performance in history, primarily impacted by intensified competition in the obesity drug market, clinical trial data falling short of expectations, and multiple profit warnings, with its stock price nearly retracing all the gains made during the "weight loss drug craze."

Mizuho healthcare analyst Jared Holz pointed out:

"It is clear that if Novo Nordisk had never entered the obesity treatment market, its current stock price level should be higher."

Novo Nordisk CEO Mike Doustdar candidly stated during an analyst meeting on Thursday:

"The experiences of the past year have made us acutely aware that the dynamics of the obesity drug market far exceed our previous understanding and expectations."

Competitive Pressure Continues to Intensify

Novo Nordisk initially started as a small manufacturer focused on insulin, with a turning point occurring after its diabetes treatment drug Ozempic (semaglutide injection) gained attention in Hollywood celebrity circles. The company subsequently redeveloped the same active ingredient into Wegovy, specifically for weight loss, and received U.S. regulatory approval in June 2021, propelling its stock price into a rapid upward trajectory.

However, despite having a first-mover advantage, Novo Nordisk underestimated the intensity and speed of market competition. The company continues to face pressure from major U.S. competitor Eli Lilly, which launched its weight loss drug Zepbound at the end of 2023, while both companies are also jointly experiencing market squeeze from low-cost generic drugs.

CEO Doustdar acknowledged this:

"Price is undoubtedly a key factor affecting business scale, and we have clearly seen this from the market penetration of compound pharmacies. Consumers' choice of generics is not due to preference but stems from the pressure of the original drug prices. We failed to fully anticipate the speed and breadth of its market coverage."

In January of this year, the launch of the oral formulation of Wegovy brought a temporary advantage to Novo Nordisk, leading to the largest stock price increase in five months. However, subsequent disappointing sales outlooks and the launch of Hims' low-priced generics once again put pressure on the stock price.

Currently, among the 34 analysts tracked by Bloomberg, the proportion giving a "buy" or equivalent rating is less than half. Even the most optimistic analysts believe that the stock is unlikely to return to its historical highs within the next 12 months