FDA scrutiny rattles Hims & Hers stock

Investing.com -- Hims Hers Health Inc (NYSE: HIMS) shares plummeted 12.6% in after-hours trading Friday following a stark warning from federal regulators. The U.S. Food and Drug Administration announced its intent to take "decisive steps" against companies mass-marketing non-approved compounded GLP-1 drugs.

The agency’s intervention specifically targets active pharmaceutical ingredients used in products that Hims & Hers and other compounding pharmacies market as alternatives to approved treatments. Officials stated these actions aim to "safeguard consumers from drugs for which the FDA cannot verify quality, safety, or efficacy."

This regulatory pivot follows a bold expansion by Hims & Hers, which recently debuted a compounded semaglutide pill priced at $49 per month. The San Francisco-based firm claims its oral delivery method is "formulated to protect the active ingredient during digestion and to support absorption."

However, the FDA is now aggressively challenging the marketing tactics used to promote these needle-free options to the public. Regulators warned that companies "cannot claim that non-FDA-approved compounded products are generic versions or the same as drugs approved by FDA."

Danish pharmaceutical giant Novo Nordisk has moved quickly to protect its intellectual property and market share for its blockbuster drug, Wegovy. The manufacturer described the new Hims & Hers offering as an "unapproved, inauthentic, and untested knockoff" in a public statement from Thursday.

Novo Nordisk intends to pursue legal and regulatory action, alleging that the telehealth provider is engaged in "illegal mass compounding." The company emphasized that it remains the sole manufacturer of a legitimate, FDA-approved oral semaglutide pill utilizing proprietary absorption technology.

Hims & Hers executives maintain that their platform provides essential accessibility and personalization for patients who are averse to traditional injections. CEO Andrew Dudum said in the GLP-1 pill announcement Thursday that the company has "spent years building the infrastructure required to put the power of choice back into the hands of the individual."

Medical leadership at the firm also emphasized the clinical utility of having a broader toolkit for weight loss management. Dr. Craig Primack stated, "Whether a patient needs a specific dosage adjustment or prefers a Compounded Semaglutide Pill over an injection, our platform now supports a deeper level of personalization."

The FDA’s latest stance signals an escalation in its campaign against what it deems misleading direct-to-consumer advertising. This follows a series of warning letters sent in late 2025 that addressed unsubstantiated claims regarding the clinical equivalence of compounded drugs.

Under its current authorities, the agency may utilize enforcement tools ranging from product seizures to legal injunctions against non-compliant entities. "We take seriously any potential violations of the Federal Food, Drug, and Cosmetic Act," the regulator noted in its Friday announcement.

The intersection of a federal crackdown and a high-stakes lawsuit from Big Pharma has created a volatile environment for telehealth investors. While Hims & Hers has rapidly expanded its footprint in the sector, regulatory hurdles may limit future growth.

The market remains focused on whether the FDA will follow through on its threat of legal action without further notice. For now, the "radical affordability" promised by Hims & Hers faces its most significant existential threat since the company’s inception.

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