Hims & Hers: Navigating GLP-1 Regulatory Headwinds and Assessing Long-Term Investment Potential

The GLP-1 weight-loss market has become a battleground for innovation and regulation, with Hims & Hers Health, Inc. (HIMS) at the center of a storm. The company's reliance on compounded semaglutide-a practice now under intense scrutiny-has exposed it to regulatory and partnership risks that threaten its growth trajectory. However, Hims & Hers' financial resilience, strategic adaptability, and long-term vision suggest that it may yet navigate these challenges.

Regulatory and Partnership Challenges: A Perfect Storm

Hims & Hers' partnership with Novo Nordisk, a cornerstone of its GLP-1 strategy, was terminated in June 2025. Novo Nordisk cited the company's continued sale of compounded semaglutide, which it deemed "unsafe and illegal" due to the use of unapproved ingredients, primarily sourced from China. This partnership, launched in April 2025 to expand access to Wegovy, had already been precarious, as the FDA's resolution of the Wegovy shortage rendered Hims & Hers' compounding rationale obsolete. The fallout was immediate: Hims & Hers' stock price plummeted, and the company faced heightened regulatory scrutiny.

The U.S. Food and Drug Administration (FDA) issued warning letters in September 2025, accusing Hims & Hers of making "false and misleading claims" by marketing compounded semaglutide as equivalent to FDA-approved drugs like Ozempic and Wegovy. These actions, coupled with an ongoing FTC investigation into subscription cancellation practices, have cast a shadow over the company's compliance culture.

Strategic Resilience: Compliance, Diversification, and Reengagement

Despite these setbacks, Hims & Hers has demonstrated a capacity to adapt. The company has shifted its compounded GLP-1 formulations from 503B to 503A compounding, a move aimed at aligning with FDA expectations for greater oversight and standardization. This pivot, though temporarily reducing GLP-1 segment revenue in Q2 2025, reflects a pragmatic response to regulatory pressures.

Financially, the company has shown remarkable resilience. Q2 2025 revenue surged 73% year-over-year to $544.8 million, with adjusted EBITDA more than doubling to $82.2 million. Full-year revenue guidance remains robust, projecting growth to $2.3–$2.4 billion, driven by GLP-1 therapies and international expansion. Hims & Hers has also diversified its offerings, reducing prices for compounded GLP-1 treatments and introducing microdosing options to retain customer loyalty.

The company's long-term strategy hinges on reengagement with pharmaceutical partners. By November 2025, Hims & Hers had resumed talks with Novo Nordisk to reintroduce Wegovy injections and a forthcoming oral obesity pill, signaling a potential reconciliation. CEO Andrew Dudum has emphasized the importance of aligning with "new GLP-1 and GIP-based treatments" as they advance through clinical trials.

Regulatory Compliance and Market Expansion

Hims & Hers' compliance efforts extend beyond GLP-1. The company has invested in AI-driven personalization and diagnostics expansion, aiming to diversify revenue streams and reduce dependence on a single product line. Its acquisition of Zava, a European telehealth platform, underscores a strategic push into international markets, with Canada as a near-term target.

However, regulatory risks persist. State attorneys general in Alabama and Connecticut have intensified enforcement against GLP-1 bootleggers, while proposed legislation like the SAFE Drugs Act of 2025 threatens to further restrict compounded drug distribution. Hims & Hers must navigate this evolving landscape without compromising its growth ambitions.

Long-Term Investment Potential: Balancing Risks and Rewards

For investors, Hims & Hers presents a paradox: a high-growth business with significant regulatory and reputational risks. The company's financials remain strong, with 31% year-over-year subscriber growth in Q2 2025, but its reliance on compounded GLP-1 therapies-a segment now under siege-raises questions about sustainability.

The key to long-term success lies in Hims & Hers' ability to pivot. By leveraging its digital health platform, expanding into high-touch specialties, and securing partnerships with major pharmaceutical firms, the company could mitigate its exposure to regulatory volatility. Yet, integration risks and the complexity of international expansion cannot be ignored.

Conclusion

Hims & Hers is at a crossroads. The termination of its Novo Nordisk partnership and regulatory scrutiny have tested its resilience, but the company's financial performance and strategic flexibility suggest it is far from finished. For investors willing to tolerate short-term turbulence, the potential rewards-driven by GLP-1 demand and global expansion-remain compelling. However, the path forward will require unwavering compliance, innovation, and a willingness to adapt to an increasingly regulated healthcare landscape.