Hims & Hers: Navigating the Post-GLP-1 Landscape – Can Innovation Outpace Regulation?

The weight-loss drug market has become a battleground of innovation, regulation, and ethical debate. At the center of this storm is Hims & Hers Health, a telehealth company that rose to prominence during the GLP-1 drug shortages of 2024–2025. Now, as the market shifts post-shortage, investors must ask: Can Hims sustain its business model in a landscape defined by tighter FDA oversight, fierce competition, and evolving consumer expectations?

The Regulatory Tightrope

Hims' reliance on compounded GLP-1 drugs—unapproved but legally gray formulations of semaglutide and tirzepatide—was both its lifeline and its liability. When the FDA declared the semaglutide shortage resolved in February 2025, it effectively ended the legal basis for compounding. Hims' partnership with Novo Nordisk was terminated in June 2025 over allegations of “illegal mass compounding,” triggering a 34% single-day stock plunge. This event underscored a critical vulnerability: Hims' business model was built on a regulatory loophole that is now closing.

The FDA's enforcement actions have left Hims with a narrow path forward. While the company pivoted to personalized compounding (e.g., adding vitamins or adjusting dosages), critics argue these tweaks don't justify continued compounding when branded drugs are available. Legal challenges from the FDA and lawsuits from pharma giants like Eli Lilly and Novo Nordisk further complicate matters. Hims' recent Super Bowl ad, which promoted compounded GLP-1 drugs without disclosing risks, drew bipartisan criticism and raised questions about its compliance with the Federal Food, Drug, and Cosmetic Act.

Strategic Adaptation: Can Hims Innovate Fast Enough?

Hims' response to the crisis has been twofold: defensive and offensive. Defensively, the company has invested in domestic production and diagnostics. Acquiring a U.S. peptide facility in California and a 503B outsourcing pharmacy (MedisourceRx) aims to reduce reliance on external compounding partners. Its acquisition of Trybe Labs for at-home blood testing adds a layer of personalization, enabling tailored treatment plans based on metabolic data. These moves signal a shift toward a more integrated, data-driven healthcare model.

Offensively, Hims is betting on personalized medicine and oral alternatives. The company now offers liraglutide (a generic version of Victoza) and is exploring oral GLP-1 formulations, which could bypass the need for injections. This pivot aligns with broader industry trends, as companies like Eli Lilly and Novo Nordisk develop oral semaglutide. However, Hims faces a steep challenge: competing with pharma giants that have decades of R&D and regulatory expertise.

The Competitive Landscape: A Crowded and Hostile Market

Hims is not alone in the GLP-1 space. Telehealth rivals like Noom and Mochi Health are also navigating regulatory headwinds, while traditional pharma companies are scaling up production of branded drugs. Novo Nordisk and Eli Lilly have increased Wegovy and Mounjaro supplies, reducing the need for compounded alternatives. Meanwhile, the FDA's crackdown on compounding has created a more level playing field for branded drugs, which are now more accessible and affordable.

Investors should also consider the financial risks. Hims' 2024 weight-loss revenue ($200 million) was largely driven by compounded semaglutide, which is no longer part of its 2025 strategy. While the company projects $725 million in weight-loss revenue for 2025, this figure excludes compounded GLP-1 drugs and relies on unproven pivots like liraglutide and oral alternatives.

Investor Implications: A High-Risk, High-Reward Proposition

Hims' long-term viability hinges on three factors:
1. Regulatory Compliance: Can the company avoid further enforcement actions while maintaining access to GLP-1 therapies? Its recent SEC filings acknowledge significant legal risks, and a single misstep could derail its strategy.
2. Innovation Execution: Will its investments in personalized medicine and diagnostics translate into sustainable revenue streams? The success of liraglutide and oral alternatives depends on clinical validation and market adoption.
3. Competitive Resilience: Can Hims differentiate itself in a market dominated by pharma giants and telehealth rivals? Its focus on affordability and personalization is a strength, but it must prove these offerings are both effective and compliant.

For investors, Hims represents a speculative bet. The company's agility and first-mover advantage in telehealth-driven weight loss are commendable, but the regulatory environment is increasingly hostile. A cautious approach is warranted: consider Hims as a small portion of a diversified portfolio, with close monitoring of FDA actions and quarterly earnings.

Conclusion: A Company at a Crossroads

Hims & Hers Health is a case study in the tension between innovation and regulation. Its ability to adapt to the post-GLP-1 era will determine whether it becomes a leader in personalized healthcare or a cautionary tale of regulatory overreach. For now, the company's stock remains volatile, reflecting both its potential and its risks. Investors who believe in its long-term vision must weigh the promise of a $2.4 billion revenue target against the reality of a market where compliance is non-negotiable.