Hims & Hers $HIMS ( ▲ 6.13% ) is facing another major legal headache after revealing the Securities and Exchange Commission has opened an investigation tied to its controversial compounded weight-loss treatments. The agency has asked the company to preserve documents related to its public statements and business dealings involving copycat GLP-1 drugs, sending shares sharply lower after the disclosure.
The probe adds to mounting pressure following a mixed earnings report and weak guidance, extending what has already been a brutal year for the telehealth stock.
The Wegovy copy fallout keeps growing
The scrutiny stems from Hims’ short-lived attempt to sell compounded versions of Novo Nordisk’s blockbuster weight-loss drug. That move has already triggered a patent lawsuit from Novo Nordisk $NVO ( ▼ 0.65% ) and potential attention from the Department of Justice, making the SEC inquiry the third major legal front.
Regulators appear particularly focused on whether the company properly disclosed risks and relationships tied to the business a critical issue for investors who piled into the GLP-1 growth narrative.
Uncertainty becomes the biggest risk
Hims says it is cooperating but cannot predict how long the investigation will last or what the financial impact could be. That uncertainty alone can weigh heavily on sentiment, especially for a company already trying to reassure investors about its growth prospects.
For now, the GLP-1 strategy that once promised explosive expansion has turned into a legal minefield. Until clarity emerges, the stock may trade less on fundamentals and more on headlines coming out of Washington and the courts.