Shares of Hims & Hers Health (NYSE: HIMS) tumbled dramatically on Friday, sinking 23.2% by 1 p.m. ET and touching an intraday low of 26.1%. This sharp decline comes as broader markets also faced losses, with the S&P 500 down 1% and the Nasdaq Composite slipping 1.3%.
FDA Ends Semaglutide Shortage: A Blow to Hims & Hers Revenue
One of the leading telehealth platforms, Hims & Hers Health, is now facing a significant challenge following a crucial decision by the U.S. Food and Drug Administration (FDA). The agency has officially removed semaglutide injection products, including the widely popular Ozempic and Wegovy, from its drug shortage list. This regulatory shift marks the end of a period where compounding pharmacies were legally permitted to produce and distribute generic versions of these blockbuster weight loss and diabetes treatments.
As the FDA gears up to take enforcement actions against compounders within the next 60 to 90 days, the availability of non-branded semaglutide products will diminish unless another shortage arises. This move is expected to restructure the weight-loss drug market, placing a tighter grip on the production and sale of these treatments.
Hims & Hers Faces a Revenue Disruption
While Hims & Hers Health does not compound its own medications, its telehealth platform significantly benefited from the ability to sell compounded semaglutide products. The company’s revenue surged over the past year, partly fueled by the rising demand for affordable alternatives to brand-name semaglutide medications.
However, this growth trajectory has now been disrupted. The FDA’s decision directly impacts a key revenue stream, raising concerns about future sales momentum. Adding to the complexity, Hims & Hers had recently announced its acquisition of a peptide facility, aiming to establish in-house compounding capabilities. This strategic move now faces uncertainty as only branded semaglutide products will remain legally available.
CEO Remains Optimistic Despite Market Reaction
Despite the severe market response, the Hims & Hers leadership remains optimistic. The company’s CEO reassured investors that its newly acquired peptide facility can still be leveraged to provide alternative weight-loss solutions tailored to consumer needs. The company plans to explore additional personalized treatments to diversify revenue streams and maintain its competitive position in the growing telehealth and wellness industry.
With telehealth services rapidly evolving and weight-loss medications remaining in high demand, all eyes will be on Hims & Hers Health to see how it adapts to this significant regulatory shift. Investors and analysts will be closely monitoring the company’s next earnings report for insights into its ability to mitigate the revenue impact and sustain long-term growth.
