Novo Nordisk sues Hims over scrapped $49 weight-loss pill copy

This photo shows Novo Nordisk headquarters in Bagsvaerd, Denmark. (Mads Claus Rasmussen/Ritzau Scanpix via AP, File)

COPENHAGEN — Novo Nordisk sued Hims and Hers Health on Monday over patent infringement after the U.S. telehealth firm launched, then canceled, a $49 copy of Novo’s weight-loss pill Wegovy following a swift backlash from U.S. authorities.

Novo’s shares rose five per cent, while Hims sank 20 per cent. Shares of Novo and rival Eli Lilly LLY.N had tumbled last week after Hims introduced the cut-price pill, which had looked set to erode Novo’s takings and jeopardize its shift towards a cash-pay consumer market.

The lawsuit, which covers Novo’s weight-loss drug in pill and injectable forms, highlights the friction between obesity drugmakers and companies selling copies based on the same active ingredients, harming the earnings of the original drug manufacturers.

“There is now a growing chorus of parties that have said, ‘Enough is enough on the compounding situation in the United States,’” Novo Nordisk’s general counsel, John Kuckelman, told Reuters, adding that Hims’ pill launch was a “tipping point.”

The lawsuit, Hims said, was a “blatant attack” by Novo on “millions of Americans who rely on compounded medications for access to personalized care.”

“Once again, Big Pharma is weaponizing the U.S. judicial system to limit consumer choice,” it said.

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‘War on GPL-1 compounders in general’

Analysts said the lawsuit and the unusually rapid U.S. Food and Drug Administration response could mark a broader crackdown on compounded GLP-1s, potentially easing competition on the big manufacturers’ patented weight-loss treatments.

“They are not only declaring war on Hims & Hers’ Wegovy pill, but GLP-1 (compounders) in general,” said Sydbank analyst Soren Lontoft Hansen.

Novo said it was “asking the court to permanently ban Hims from selling unapproved, compounded drugs that infringe our patents, and is seeking to recover damages.”

U.S. regulations allowed rival versions to enter the market when Novo’s and Lilly’s drugs were in shortage. They then remained on the market after the shortages ended as the compounding industry leaned on U.S. law allowing them to mix and sell ingredients in medicines that are personalized such as in different doses than the branded version.

The lawsuit marks a shift in the Danish pharmaceutical giant’s legal strategy against compounding pharmacies. Novo has sued several compounders for allegedly selling unsafe, falsely advertised Wegovy “knockoffs” that violate its trademark rights, but the Hims lawsuit is its first U.S. patent case against a compounder.

“At minimum, Novo probably hopes this patent filing creates a deterrent effect against Hims and other compounders thinking about offering semaglutide products, while also giving Novo a shot at money damages for past and ongoing sales of those products,” said Gaston Kroub, a partner at intellectual property law firm K2K IP Law.

Novo, Lilly struck pricing deals with Trump

The FDA said on Friday it would restrict GLP-1 ingredients used in compounded drugs.

Hims, whose pill was based on semaglutide - the active ingredient in Novo Nordisk’s blockbuster drugs Wegovy and Ozempic - said on Saturday it would stop offering the treatment. The injectable version remains on its website and the company did not respond when asked if it would stop making them.

Novo and Lilly struck high-profile pricing deals with U.S. President Donald Trump last year and their weight-loss drugs are prominent on the new TrumpRx discounted-drugs website.

“I think the FDA made it quite clear that they would not tolerate a compounded Wegovy pill. This was an attack on the authority of the FDA,” said Markus Manns at Novo and Lilly shareholder Union Investment.

Lilly’s shares were off less than one per cent.

Rare victory for Novo as it fights compounded drugs

Novo Nordisk’s market value is down nearly 50 per cent over the past year. Its stock sank 17 per cent in a day last week after it flagged “unprecedented price pressure.”

Despite pioneering the obesity drug market, the recent setbacks show how quickly Novo’s dominance has eroded. And with Eli Lilly’s oral GLP-1 pill orforglipron expected to receive FDA approval in April, competition is set to intensify.

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In the key U.S. market, the obesity drugs made by Novo Nordisk and Lilly are driving a shift to a consumer-focused market in which drugmakers are looking toward cash-pay channels and telehealth to reach tens of millions of Americans.

(Reporting by Stine Jacobsen and Louise Rasmussen in Copenhagen, Maggie Fick in London; Editing by Louise Heavens, Joe Bavier and Bernadette Baum)