After the FDA issued warning letters to 30 GLP-1 telemedicine companies, Novo Nordisk's stock price rose by 3%

Investing.com - Novo Nordisk (CSE:NOVOb) stock rose over 3% on Wednesday after the U.S. Food and Drug Administration issued warning letters to 30 telemedicine companies, accusing these companies of making false or misleading claims about the combination versions of GLP-1 drugs, involving the company’s semaglutide and Eli Lilly’s tirzepatide.

The FDA stated that these companies violated regulations by promoting their combination products as “generic Zepbound” or “generic Mounjaro” (Eli Lilly’s brand name for tirzepatide), and selling the drugs under their own trademarks without disclosing they are combination manufacturers.

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The agency reiterated that combination drugs are not approved by the FDA and are different from generics. Companies receiving warning letters must respond in writing within 15 business days.

“Combination drugs may be important for overcoming shortages or meeting patients’ unique needs — but manufacturers of such combinations should not attempt to bypass FDA approval processes,” FDA Director Dr. Robert M. Califf said in a statement on Tuesday.

This is the second round of warning letters issued since the agency began cracking down on misleading direct-to-consumer drug advertising in September last year.

The FDA said that over the past six months, it has sent thousands of such letters to pharmaceutical and telemedicine companies, surpassing the total sent in the previous ten years.

Citi Research noted that given the tightening regulatory environment, these warning letters carry more weight than ever.

The brokerage pointed out that the FDA’s move to refer Hims & Hers to the Department of Justice in early February suggests more serious consequences may follow, especially with Medicare expected to broadly cover GLP-1 drugs in the second quarter.

Citi added that Director Califf has separately expressed intentions to restrict the active pharmaceutical ingredients used in combination GLP-1 products, which would further tighten the market space for combination manufacturers.

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