Unlocking Success in Telehealth: How Hims & Hers is Managing Legal and Regulatory Challenges

The recent end of Hims & Hers Health’s partnership with Novo Nordisk in June 2025 has created a significant shift for the telehealth company. This development has raised concerns about its business model and generated significant legal and regulatory attention. For investors, the key question remains: Can HIMS continue to grow amidst these challenges while addressing issues of trust and financial risk?

HIMS has primarily focused on offering compounded versions of FDA-approved medications, like Wegovy (semaglutide), which has placed it in a gray area of regulatory compliance. The FDA had previously allowed compounding during medication shortages, but when this flexibility was revoked in February 2025, HIMS’ stock took a hit. The termination of the Novo Nordisk partnership, coupled with allegations of misleading marketing, further fueled doubts.

The FDA’s clear stance against mass compounding of approved drugs without explicit permission means that HIMS faces a major challenge. Now, as regulatory bodies boost their oversight, the company’s ability to innovate legally is crucial for its future. Industry experts suggest that adapting to these regulations quickly is vital for business survival.

Legal troubles have emerged as another significant risk. Class-action lawsuits led by firms like Hagens Berman claim that HIMS did not fully disclose risks to investors or accurately represent its relationship with Novo Nordisk. With a court deadline for a lead plaintiff approaching, this litigation could hinder investor confidence and influence stock performance.

In terms of finance, HIMS is currently undergoing a liquidity challenge. As of early 2025, it had around $120 million in cash but was losing about $30 million each quarter. With ongoing litigation, any substantial settlement could put additional pressure on its finances. Although the company raised $450 million in convertible notes to support growth, repairing its reputation may weigh more heavily than immediate financial resources.

On a positive note, HIMS has strengths that might help it recover. It operates a scalable digital health platform, with revenue reaching $1.48 billion in 2024. Diversifying into hair loss and sexual health creates some stability against industry risks. Additionally, plans for international expansion, particularly a generic semaglutide in Canada, could provide new revenue streams and reduce reliance on U.S. markets.

However, the dependency on collaborations with pharmaceutical companies like Novo Nordisk poses ongoing risks. HIMS must now focus on securing partnerships that meet regulatory expectations or invest more in developing FDA-approved alternatives.

For investors, caution is essential. HIMS has experienced volatile stock trading, reflecting both optimism for its telehealth approach and concerns about legal issues. Looking ahead, three areas should be on investors’ radar:

1. Litigation outcomes: Positive resolutions could stabilize stock prices, while negative results might lead to more losses.
2. Regulatory compliance: The company’s ability to adhere to FDA guidelines will affect its operational flexibility.
3. Partnership strategies: Successfully forming new partnerships or creating in-house drug options will enhance its competitive position.

In conclusion, Hims & Hers Health is at a critical juncture. Its telehealth platform has shown potential for growth, but recent challenges reveal underlying weaknesses. Investors must carefully weigh the risks and rewards ahead. The company’s ability to navigate the complex landscape of regulations and legal challenges will ultimately determine its future. Those willing to insulate themselves from these uncertainties may find valuable opportunities as HIMS endeavors to build a more robust and compliant business.

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