Not even two days after Novo Nordisk A/S pinned its comeback hopes on a new weight-loss pill that’s off to a strong start, a knock-off version is already on the market that the Danish drugmaker says is illegal.

Novo’s shares plunged on Thursday after telehealth firm Hims & Hers Health Inc. launched a cheaper copycat version of its Wegovy pill. The move comes during a brutal week for the Danish drugmaker, which has lost $60 billion in market value after warning investors that sales could decline as much as 13% this year.

Hims will offer its copycat pill starting at $49 for the first month, then $99 monthly for those who sign up for a five-month subscription, it said in a statement. Novo launched the brand-name Wegovy pill in January, with prices starting at $149 a month.

Novo called Hims’ move “illegal mass compounding that poses a significant risk” to patients.

“Novo Nordisk will take legal and regulatory action to protect patients, our intellectual property and the integrity of the U.S. gold-standard drug approval framework,” the drugmaker said in a statement.

Novo shares fell 7.9% in Copenhagen, while rival Eli Lilly & Co. dropped 7.1% at 12:26 pm in New York. Hims was down 1.4%, after initially surging as much as 14% on the news.

Hims defended its offering, saying on X that this isn’t the first time a drug company has criticized their business as “dangerous, illegal, or bad for the marketplace.”

“This narrative is as predictable as it is outdated and false,” the company said on X.

The new discount pill casts a shadow over Novo’s launch, which was supposed to help it gain an edge in the ultra-competitive obesity market. The Danish drugmaker has been losing ground to Lilly and telehealth firms like Hims that sell copycat versions of its drugs.

Novo’s pill is expected to generate $1.3 billion to $1.35 billion in its first year, according to Mizuho health-care specialist Jared Holz. In the four weeks since the pill launched, more than 170,000 patients have started taking it, Novo said. Analysts have hailed it as one of the most successful drug launches in recent memory.

Hims and other telehealth companies pounced on the opportunity to sell lower cost copies of Lilly’s and Novo’s weight loss shots during widespread supply shortages in recent years. Those shortages have since ended, meaning companies were supposed to stop selling copies of the shots.

They’ve gotten around that by tweaking dosages or adding ingredients so that their products are considered different enough from the brand-name drugs.

The new Hims pill “uses a different formulation and delivery system than FDA-approved oral semaglutide,” the telehealth company said in a statement, referring to the active ingredient in Novo’s drugs.

“The compounded semaglutide pill offered today is not an essential copy of Wegovy,” Hims spokesperson Abby Reisinger said.

Novo’s pill uses a proprietary technology that’s designed to protect the active ingredient, semaglutide, from harsh stomach acids to aid in its absorption. On a call with analysts Thursday, Novo Chief Executive Officer Mike Doustdar said that without this protective technology, “this just doesn’t work. It just simply doesn’t work.”

Doustdar said consumers would be “wasting $49 in my opinion” if they turned to alternatives as “your gut enzyme will basically get rid of it and it will not get to your bloodstream.”

Hims claims that its pill is also formulated to protect the active ingredient during digestion.

Hims and Novo have a tenuous history. They teamed up last year to offer discounted versions of Novo’s weight loss shots, but Novo abruptly ended the partnership less than two months later. The Danish drugmaker accused Hims of using “deceptive marketing” to sell copycat versions of its obesity blockbuster Wegovy.

Analysts are already predicting that other new weight loss products, including one that Lilly is developing, are in their crosshairs. Lilly has said it expects to get the regulatory greenlight for its pill as early as April.

The news was first reported by Reuters.

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With assistance from Lisa Pham, Jessica Nix and Michelle Fay Cortez.

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