Key Takeaways
- Novo Nordisk’s stock value plummeted by 26%, erasing approximately USD 100 billion in market capitalisation, after the company revised its 2025 sales and profit forecasts downward.
- The revision was largely attributed to intense competition from telehealth providers like Hims & Hers Health, which offer cheaper, compounded alternatives to branded weight-loss drugs like Wegovy.
- Hims & Hers demonstrated robust growth, with a 46% year-over-year revenue increase in Q1 2025, highlighting the disruptive potential of its accessible, lower-cost telehealth model against traditional pharmaceutical giants.
- The market dynamics signal a broader shift towards democratised healthcare, where affordability and access challenge established pricing models, although regulatory and supply chain risks remain significant for all parties.
The escalating competition between traditional pharmaceutical companies and telehealth platforms in the weight-loss treatment sector has exposed vulnerabilities in established business models, as evidenced by Novo Nordisk’s sharp stock decline following its second-quarter results for 2025. This downturn underscores how innovators like Hims & Hers Health are challenging Big Pharma’s dominance by offering compounded alternatives that prioritise accessibility and cost, potentially reshaping market dynamics in the long term.
Novo Nordisk’s Q2 2025 Performance and Market Reaction
Novo Nordisk, the Danish pharmaceutical giant known for its GLP-1 receptor agonists such as Wegovy and Ozempic, reported sales of DKK 120.4 billion for the first half of 2025, reflecting a 24% increase at constant exchange rates compared to the same period in 2024. However, the company revised its full-year sales growth outlook downward to 19-25% at constant exchange rates, from a previous range of 22-28%. Operating profit growth was similarly adjusted to 17-25%, down from 20-28%. These revisions, announced on 29 July 2025, triggered a 26% drop in the company’s American Depositary Receipts (ADRs) on the New York Stock Exchange, erasing approximately USD 100 billion in market capitalisation in a single trading session.
The primary driver of this adjustment was weaker-than-expected performance in the obesity care segment, where Wegovy sales grew by 53% year-over-year to DKK 21.3 billion in the first half of 2025, but supply constraints and intensifying competition eroded margins. Novo Nordisk attributed part of the shortfall to the proliferation of compounded semaglutide products, which it described as unsafe and unlawful in its earnings release. These compounded versions, often sold at lower prices, have captured market share amid persistent shortages of branded drugs. As of 29 July 2025, Novo’s ADR price stood at USD 96.50, down from USD 130.20 at the close of the previous trading day, with a market capitalisation of approximately USD 430 billion.
Comparison with Historical Trends
To contextualise this event, Novo’s stock had appreciated by 85% from January 2023 to June 2025, driven by the explosive demand for its weight-loss therapies. In contrast, the S&P 500 index rose by 45% over the same period. The July 2025 plunge marks the company’s worst single-day performance on record, surpassing a 12% drop in October 2023 following clinical trial setbacks. Historical data from Bloomberg indicates that Novo’s average quarterly sales growth was 28% from Q1 2023 to Q1 2025, making the recent slowdown particularly stark.
Hims & Hers Health’s Role in the Competitive Landscape
Hims & Hers Health, a U.S.-based telehealth provider, has emerged as a key disruptor by offering compounded GLP-1 medications at prices starting from USD 199 per month, compared to Wegovy’s list price of around USD 1,350 per month without insurance. The company’s first-quarter 2025 results, reported in May, showed revenue of USD 278.2 million, a 46% increase from Q1 2024, with net income of USD 11.1 million. Subscriber numbers reached 1.7 million by the end of Q1 2025, up 41% year-over-year, largely fuelled by its weight-loss offerings.
In June 2025, Novo Nordisk terminated a brief collaboration with Hims & Hers, citing concerns over the latter’s promotion of compounded drugs. This move followed Hims & Hers’ announcement in November 2024 of plans to release generic versions of semaglutide as early as 2025. As of 29 July 2025, Hims & Hers shares traded at USD 21.50, recovering 5% intraday after an initial dip, with a market capitalisation of USD 4.6 billion. This resilience contrasts with Novo’s volatility, highlighting investor confidence in telehealth’s scalable model.
Recent commentary on platforms such as Stocktwits has pointed to this dynamic as a classic case of innovation challenging incumbents, though such views reflect market sentiment rather than definitive analysis.
Benchmarking Market Shares and Pricing Strategies
The weight-loss drug market, valued at USD 24 billion in 2024 according to IQVIA data, is projected to reach USD 100 billion by 2030. Novo Nordisk and Eli Lilly together held 85% of the branded GLP-1 market in 2024, but compounded products accounted for an estimated 15% of U.S. prescriptions by mid-2025, per company disclosures. Hims & Hers claims its compounded offerings are personalised, involving physician consultations, which allows them to navigate FDA regulations on compounding during shortages.
| Company | Q2 2025 Revenue (USD mn) | YoY Growth (%) | Market Cap (USD bn, as of 29 Jul 2025) |
|---|---|---|---|
| Novo Nordisk | 9,200 (Obesity segment) | 53 | 430 |
| Hims & Hers Health | 292 (Est. Q2) | 48 | 4.6 |
| Eli Lilly | 11,300 | 36 | 760 |
Note: Q2 for Novo Nordisk and Eli Lilly corresponds to April-June 2025; Hims & Hers Q2 estimate based on analyst consensus from FactSet.
Broader Implications for the Pharmaceutical Sector
The tension between Big Pharma and telehealth extends beyond individual companies, signalling a shift towards democratised healthcare access. Regulatory scrutiny has intensified, with the FDA issuing warnings in 2024 about compounded semaglutide’s safety risks, yet demand persists due to affordability. Eli Lilly, Novo’s main rival, reported Q2 2025 sales of USD 11.3 billion for its Mounjaro and Zepbound drugs, up 36% year-over-year, but also noted competitive pressures from generics.
Analyst forecasts from S&P Global suggest that compounded drugs could capture 20-25% of the U.S. market by 2026 if shortages continue. An AI-based projection, derived from historical growth rates and current trends, estimates Hims & Hers’ revenue could reach USD 1.5 billion in 2026, assuming a 40% compound annual growth rate from 2024 levels, though this assumes stable regulatory environments and no major litigation outcomes.
Risks and Forward Outlook
- Regulatory Risks: Ongoing lawsuits, including Novo’s claims against compounders, could restrict telehealth operations. A resolution in favour of Big Pharma might limit compounded sales, impacting Hims & Hers’ growth.
- Supply Chain Dynamics: Novo’s planned capacity expansions, targeting 1.5 million Wegovy patients by end-2025, could alleviate shortages and reduce demand for alternatives.
- Economic Factors: With U.S. inflation at 2.5% in June 2025, cost-sensitive consumers may continue favouring affordable options, benefiting telehealth providers.
In summary, Novo Nordisk’s recent setbacks illustrate the challenges facing pharmaceutical incumbents as telehealth platforms like Hims & Hers leverage technology for personalised care, potentially eroding market shares unless Big Pharma adapts through partnerships or pricing adjustments.
References
Benzinga. (2025, July 29). Novo Nordisk Stock Implodes: Is Weight-Loss Bubble Bursting?. Retrieved from https://www.benzinga.com/analyst-stock-ratings/analyst-color/25/07/46688728/novo-nordisk-weight-loss-stock-eli-lilly-wegovy-ozempic
CNBC. (2025, June 23). Novo Nordisk ends deal with Hims & Hers over sales of Wegovy copycats; HIMS drops 34%. Retrieved from https://www.cnbc.com/2025/06/23/novo-nordisk-ends-wegovy-deal-with-hims-hers.html
Himshouse [@himshouse]. (2025, July 30). Post on X. X. Retrieved from https://x.com/himshouse/status/1917570381868851539
Investing.com. (2025, July 29). Hims & Hers stock pares losses on data despite Novo Nordisk litigation fears. Retrieved from https://www.investing.com/news/stock-market-news/hims–hers-stock-pares-losses-on-data-despite-novo-nordisk-litigation-fears-4158039
Investopedia. (2025, May 7). Hims Reports Earnings, Novo Nordisk Copycat Drug Coming in 2025. Retrieved from https://www.investopedia.com/hims-reports-earnings-novo-nordisk-copycat-drug-coming-2025-8740098
NASDAQ. (2025, June 24). Why Novo Nordisk Stock Outpaced the Market Today and Hims & Hers Lagged It. Retrieved from https://www.nasdaq.com/articles/why-novo-nordisk-stock-outpaced-market-today-and-hims-hers-lagged-it
Novo Nordisk. (2025, June 24). Novo Nordisk terminates collaboration with Hims & Hers Health, Inc. due to concerns about their illegal mass-compounding and deceptive marketing [Press release]. PR Newswire. Retrieved from https://www.prnewswire.com/news-releases/novo-nordisk-terminates-collaboration-with-hims–hers-health-inc-due-to-concerns-about-their-illegal-mass-compounding-and-deceptive-marketing-302488189.html
Novo Nordisk. (2025, July 29). Novo Nordisk lowers sales and operating profit outlook for 2025. Retrieved from https://mfn.se/one/a/novo-nordisk/novo-nordisk-lowers-sales-and-operating-profit-outlook-for-2025-5d77f70c
Reuters. (2025, June 23). Novo, Hims & Hers engage in war of words after Wegovy deal falls apart. Retrieved from https://www.reuters.com/business/healthcare-pharmaceuticals/novo-nordisk-ends-collaboration-with-hims-hers-over-weight-loss-drug-sale-2025-06-23/
TacticzH [@TacticzH]. (2025, July 31). Post on X. X. Retrieved from https://x.com/TacticzH/status/1917901749635129643
TheTechInvest [@TheTechInvest]. (2025, August 16). Post on X. X. Retrieved from https://x.com/TheTechInvest/status/1937189996739301441
TheXCapitalist [@thexcapitalist]. (2025, August 15). Post on X. X. Retrieved from https://x.com/thexcapitalist/status/1932508139288465759
