Hims shares jump on deal to offer Novo's Wegovy, Ozempic on its platform

March 9 (Reuters) - Hims & Hers' ‌shares were up ​over ​40% on Monday, after Novo Nordisk agreed to sell its blockbuster Wegovy and Ozempic drugs through the telehealth firm's platform, ‌signaling an end to the dispute between the two companies.

The ⁠deal lands roughly a month after Novo filed a patent‑infringement lawsuit against Hims, following ‌the U.S. telehealth firm's ‌launch, and then cancellation, of a $49 copy of Novo's obesity pill.

Analysts said the development was clearly positive for Hims, which was otherwise facing ​the prospect of a prolonged and costly legal battle.

"We believe that Novo's case against HIMS was strong, and this announcement also reduces ⁠risk related to potential FDA and DOJ enforcement actions against HIMS," BTIG analyst David Larsen wrote ​in a note.

Hims shares were up 41.1% at $22.2 midday, while U.S.-listed shares of Novo were up 2.8%.

For Novo, this ​deal is a significant step forward ‌in dealing with a major commercial headwind, according to BMO Capital Markets analyst Evan David Seigerman.

Novo is grappling with ⁠telehealth firms offering cheaper compounded copycat versions of its obesity treatments.

"While the announcement does not solve all the commercial woes that led to a below consensus ⁠revenue guide, one major issue has been resolved," Seigerman wrote in a note.

The financial ​impact for Hims, however, remains uncertain.

Under the agreement, Hims will offer regulatory-approved Ozempic and Wegovy injectables, as well as the Wegovy pill, to U.S. consumers on its ‌platform at Novo's self-pay prices.

In return, Hims will no longer advertise compounded GLP-1 drugs, though it will continue ‌offering them when providers deem it clinically necessary.

Analysts said although selling Novo's ⁠branded products would bring a ‌higher revenue contribution, it ​will likely generate lower margins for Hims than its compounded offerings.

(Reporting by Mrinalika Roy in Bengaluru; Editing by Krishna ‌Chandra Eluri)

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