Hims & Hers, the innovative telehealth company that skyrocketed to fame with its catchy Super Bowl ad and claims to revolutionize healthcare, is undergoing a challenging period.

The San Francisco-based firm saw its stock plunge this week after its partnership with Danish pharmaceutical giant Novo Nordisk came to a sudden halt. Just two months into their collaboration, Novo cut ties with Hims & Hers, accusing them of jeopardizing patient safety through 'deceptive' marketing practices, including offering a knockoff version of the popular weight-loss drug, Wegovy.

A Bumpy Ride for Telehealth Giants

In the wake of this breakup, both companies have been trading barbs publicly, escalating tensions not only between them but also illuminating the growing rift between telehealth startups and established pharmaceutical firms. Hims & Hers had ambitious plans of reaching $6.5 billion in revenue by 2030, but this disruption raises questions about its financial trajectory.

Aaron DeGagne, a healthcare analyst at PitchBook, suggested that Novo now views Hims & Hers as a competitor rather than a partner, indicating a fundamental shift in their relationship.

Stock Rollercoaster: What Lies Ahead?

This tumultuous week hit Hims & Hers hard, with shares suffering a nearly one-third loss in valuation following the announcement. Earlier in the year, the stock had surged over 150%, only to face dramatic volatility. However, the stock did climb nearly 7% on Friday, closing at $49.41.

Despite these setbacks, some analysts believe Hims & Hers can still thrive, noting its expansion beyond weight-loss offerings. Still, they acknowledge the potential gap in revenue following the end of its NovoCare partnership, which allowed users to purchase Wegovy through their platform.

A Disruptive Force in Healthcare

Founded in 2017, Hims & Hers began by addressing men’s health issues like erectile dysfunction and hair loss, creating a discreet online healthcare platform. Co-founder and CEO Andrew Dudum positioned the company as a solution for patients who felt shame discussing their health concerns in traditional settings, promoting accessibility and affordability.

From $148.8 million in revenue in 2020, Hims & Hers expects to soar to between $2.3 billion and $2.4 billion this year as it caters to a growing subscriber base of 2.4 million.

Controversial Marketing Raises Eyebrows

Amid its rapid growth, Hims & Hers has faced scrutiny over its aggressive marketing strategies, particularly during the Super Bowl. Critics, including medical professionals and politicians, expressed concerns over the promotion of compounded drugs without adequate risk disclosures.

While compounded drugs can offer tailored treatments, they come with risks, as they are not FDA-approved—a fact that the agency warns consumers about, especially when alternatives are available.

The Wegovy Fallout and Future Implications

The breakdown with Novo Nordisk revolves around Hims & Hers’ sales of compounded Wegovy-like drugs, marketed aggressively at just $165 a month. Just weeks after announcing a partnership to offer Wegovy more affordably through a Hims membership, Novo Nordisk accused Hims of misleading marketing and violating laws related to compounded drugs.

In response to these claims, Dudum firmly stated that Hims & Hers would continue to provide various treatments, refusing to bend to what he called anti-competitive practices from pharmaceutical companies. The dispute raises important questions about the future dynamics of telehealth in relation to big pharma and how it will shape access to essential medications moving forward.