Hims Stock Plunges as FDA Resolves Weight-Loss Drugs Shortage

Shares of Hims & Hers Health (NYSE: HIMS) plummeted as much as 12% in trading on Wednesday after the U.S. Food and Drug Administration (FDA) resolved the shortage of Novo Nordisk's popular weight-loss and diabetes drugs, Wegovy and Ozempic. The resolution of the shortage is a significant blow to Hims & Hers, which has been capitalizing on the demand for GLP-1 drugs by offering compounded semaglutide products at a cheaper price than name-brand versions.

The FDA's decision to remove all doses of Wegovy and Ozempic from its drug shortage list indicates that the drugs are now widely available, making it illegal for compounding pharmacies like Hims & Hers to continue selling copycat versions. This development is likely to have a substantial impact on Hims & Hers' revenue and earnings, as the company's primary source of income has been its compounded semaglutide products.



Bank of America analysts have warned that Hims & Hers' reliance on GLP-1 sales could lead to a significant decrease in revenue, as the company may struggle to find alternative revenue streams. BofA estimates that by Q2 2025, GLP-1 sales could comprise more than 50% of Hims & Hers' sales, making the company overly reliant on a single product.

Hims & Hers' stock price has been volatile, and the company's future growth prospects are uncertain. While some analysts predict that Hims & Hers' revenue will continue to grow, others, like BofA, have a more pessimistic outlook. The company's future earnings will depend on its ability to diversify its product offerings and maintain its competitive advantage in the market. However, the resolution of the shortage may make it more challenging for Hims & Hers to achieve this.

In conclusion, the FDA's decision to resolve the shortage of Novo Nordisk's weight-loss drugs is a significant setback for Hims & Hers Health. The company's reliance on compounded semaglutide products has been its primary source of revenue, and the resolution of the shortage may force Hims & Hers to explore alternative strategies to maintain its market position and growth trajectory. The competitive landscape for Hims & Hers is likely to shift, with competitors like Eli Lilly and Novo Nordisk potentially expanding their reach and new entrants emerging to capitalize on the high demand for GLP-1 drugs.