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Novo Nordisk has dropped its legal case against telehealth provider Hims & Hers over patent infringement, after the two companies agreed Hims would sell Novo's branded medicines through its platform.
"We have decided to drop the current court proceedings and, of course, we reserve to bring that back if need be, but I don't foresee that happening," CEO Mike Doustdar told CNBC's Charlotte Reed on Monday.
Under the agreement, Hims will offer access to injectable and oral semaglutide, sold as Ozempic and Wegovy, at the same price as other telehealth platforms, and Hims will no longer advertise compounded GLP-1 drugs on its platform or in its marketing, the companies said in statements on Monday.
Shares of Hims soared as much as 50% in premarket trading. Novo's Copenhagen-listed stock climbed 1.7%.
In February, Novo said it would sue Hims for what it called "mass illegal compounding" after the latter announced it would sell a copycat version of the Wegovy pill for $49, roughly $100 less than Novo sells the branded pill for through its direct-to-consumer platform NovoCare.
Hims has profited hugely from selling copycat versions of the blockbuster weight-loss drug through a loophole in U.S. regulations that allows companies other than the patent holder to sell a drug if it is in shortage.
While semaglutide was in shortage in the early days of the drug, Novo has since resolved supply restraints as it ramped up manufacturing. Hims, however, continued selling copycat versions of the drugs, arguing that its copies are "personalized" and therefore legal.
Semaglutide's patent is protected in the U.S. until 2032.
Last year, Novo and Hims partnered to offer discounted weight loss jabs to the telehealth company's customers. Novo ended the collaboration just two months later and said Hims used "deceptive" marketing that put patient safety at risk.
"It's a very different situation than the last time we did this," Doustdar told CNBC.
"Hims & Hers have agreed that upon receiving our products, they will no longer advertise, promote, market compounded products to the masses," he said, adding that Hims has now agreed to change its business model to reserve the compounding versions "only to those rare cases where they're needed."
Novo now has more than 600,000 Wegovy pill scripts, Doustdar said.
Doustdar acknowledged that at the time of launching the Wegovy pill in January, there were question marks, "a bit fuelled by our competitor," that the restrictions may limit the uptake of the pill.
"Well, I have news for you, this has been absolutely not the case," he said. "People are really interested because it's the most efficacious pill right now in the market."
Hims' existing patients on compounding semaglutide "will have the opportunity to transition to FDA-approved medicines when determined clinically appropriate by their providers," Hims said in a statement.
