March 9 (Reuters) - Hims & Hers' shares were up over 50% in premarket trading on Monday following reports Novo Nordisk plans to sell its weight-loss drugs on the telehealth firm's platform, signaling a potential end to the dispute between the two companies.
Late Friday, Bloomberg News reported Novo and Hims were preparing to announce a new partnership. The report suggested such a deal would also likely resolve Novo's recent patent‑infringement lawsuit against Hims, following the U.S. telehealth firm's
launch, and then cancellation, of a $49 copy of Novo's obesity pill.
The U.S. Food and Drug Administration had also threatened action against Hims.
Leerink analyst Michael Cherny described the news as "both a surprise and an unabashed positive for HIMS' stock" which has faced the prospect of a prolonged and costly legal battle.
Hims shares were up 54% at $24.2 premarket, while U.S.-listed shares of Novo were marginally up.
Cherny said the deal suggests Novo is expanding its distribution network and Hims' large consumer reach makes it an attractive channel once legal issues are cleared.
The financial impact for Hims, however, remains uncertain.
Barclays analysts in a note said if the deal is confirmed, Hims may offer members access to NovoCare Pharmacy at roughly $149 per month for the pill, generating far lower margins for Hims than its compounded offerings.
Still, Barclays said any agreement that averts a multi-year trial would be a net positive for Hims.
Last year, Novo ended a short-lived agreement to sell its Wegovy weight-loss drug through Hims over the company's marketing tactics and continued sales of Wegovy copies.
(Reporting by Mrinalika Roy in Bengaluru; Editing by Krishna Chandra Eluri)
