Hims & Hers (HIMS) stock fell as much as 27% early Monday after the Food and Drug Administration announced Friday that the agency planned to take "decisive steps" to crack down on the sale of compounded GLP-1s, such as those sold by the company.

The company is also facing a lawsuit filed on Monday by Novo Nordisk (NVO), the maker of Ozempic, which seeks to bar Hims & Hers from selling compounded versions of its weight-loss drugs.

In its Friday statement, the FDA announced "its intent to take decisive steps to restrict GLP-1 active pharmaceutical ingredients (APIs) intended for use in non-FDA-approved compounded drugs that are being mass-marketed by companies — including Hims & Hers and other compounding pharmacies — as similar alternatives to FDA-approved drugs."

Popular GLP-1 drugs include Novo Nordisk's Ozempic and Eli Lilly's (LLY) Mounjaro, among other products on the market.

Hims & Hers sells cheaper versions of these drugs directly to consumers in "compounded" forms, which differ slightly from FDA-approved versions but contain the same active ingredient.

In its statement on Friday, the FDA also said it was "taking steps to combat misleading direct-to-consumer advertising and marketing following warning letters that were sent in the fall of 2025."

The statement added: "In promotional materials, companies cannot claim that non-FDA-approved compounded products are generic versions or the same as drugs approved by FDA. They also cannot state compounded drugs use the same active ingredient as the FDA-approved drugs or that compounded drugs are clinically proven to produce results for the patient."

With Monday's decline, Hims & Hers stock is down about 50% this year. In late February 2025, the stock closed as high as $68 per share. On Monday morning, shares were trading below $17.

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