Hims & Hers Health Stock Takes a Hit Amid FDA Crackdown on Weight Loss Drug Copies

Hims & Hers Health's stock has dipped amid FDA scrutiny over its cost-effective version of Wegovy due to safety concerns. Analysts offer varied price targets, predicting potential declines from current levels. The overall recommendation for the company remains at a "Hold" status from Wall Street analysts.

Hims & Hers Health, Inc. (NYSE: HIMS) has seen its stock price dip amid increased scrutiny from the FDA over its cost-effective version of Wegovy. The company's stock has faced downward pressure as concerns over the safety of the medication have come to light. Analysts have offered varied price targets, predicting potential declines from current levels, while the overall recommendation from Wall Street analysts remains at a "Hold" status.

The FDA has been investigating the safety of knockoff versions of GLP-1 drugs, including Wegovy, which are being sold by companies seeking to capitalize on the hype surrounding the popular weight-loss medication. The agency has expressed concerns over the potential risks posed by these counterfeit drugs, which are made by unregistered entities using illegally imported ingredients [2].

Hims & Hers Health has been one of the companies targeted by these investigations. The company's stock has been particularly affected by the FDA's scrutiny, with analysts predicting potential declines from current levels. Despite the negative news, the company's overall recommendation from Wall Street analysts remains at a "Hold" status, indicating a cautious approach to the stock.

In response to the FDA's concerns, lawmakers have urged the agency to crack down on the booming market for knockoff weight-loss drugs. A group of bipartisan lawmakers has asked the FDA to stop counterfeit and copycat versions of GLP-1 drugs from flooding the market and to work with US Customs and Border Patrol agents to stop illegal shipments [2].

The company has faced multiple lawsuits alleging securities fraud, which have further impacted its stock price. A lawsuit filed by Levi & Korsinsky, LLP alleges that the company made false statements and concealed that it was engaged in the deceptive promotion and selling of illegitimate, knockoff versions of Wegovy that put patient safety at risk [1]. Another lawsuit, filed by Faruqi & Faruqi, LLP, also alleges that the company's positive statements about its business, operations, and prospects were materially misleading and lacked a reasonable basis [3].

Despite these challenges, Hims & Hers Health has continued to grow its subscriber base and revenue. The company surpassed 2.4 million subscribers with 95% recurring revenue and over 85% retention, driving 111% YoY revenue growth. However, the company's stock price has been volatile, reflecting the ongoing uncertainty surrounding the safety of its products and the legal challenges it faces [6].

Analysts have offered varied price targets for the company's stock, with some predicting potential declines from current levels. While the overall recommendation from Wall Street analysts remains at a "Hold" status, the company's ability to navigate the challenges it faces will be crucial in determining its future performance.

References:

[1] https://www.morningstar.com/news/pr-newswire/20250725ny37224/levi-korsinsky-announces-the-filing-of-a-securities-class-action-on-behalf-of-hims-hers-health-inchims-shareholders

[2] https://finance.yahoo.com/news/lawmakers-press-fda-target-knockoff-211748077.html

[3] https://stockanalysis.com/stocks/hims/