Hims & Hers, a prominent digital health company known for prescribing compounded semaglutide, experienced a significant market setback following the FDA's recent announcement. The company's shares plummeted over 21% after the FDA declared that the shortage of semaglutide injection products had been resolved. This development is poised to impact Hims & Hers' operations, particularly as the FDA plans to initiate regulatory actions against compounders in the coming months.
Hims & Hers has seen a surge in demand for glucagon-like peptide-1 (GLP-1) treatments, including semaglutide, in recent years. To better meet this demand, the company has strategically acquired a U.S.-based peptide facility and Trybe Labs, a New Jersey-based at-home lab testing facility. These acquisitions aim to enhance Hims & Hers' capability to deliver personalized medications and streamline its supply chain.
Since May, Hims & Hers has been offering compounded semaglutide to patients, providing an alternative for those facing supply challenges and insurance barriers. This compounded version of semaglutide, the active ingredient in Novo Nordisk's Wegovy and Ozempic, is priced under $200—significantly more affordable compared to the approximately $1,000 cost of Novo Nordisk's brands without insurance coverage. However, the FDA does not evaluate the safety and efficacy of such compounded products.
The FDA's impending regulatory actions seek to "avoid unnecessary disruption to patient treatment." It plans to address any violations by compounders within the next 60 to 90 days. In response, Hims & Hers CEO Andrew Dudum affirmed the company's commitment to compliance, saying:
"Now that the FDA has determined the drug shortage for semaglutide has been resolved, we will continue to offer access to personalized treatments as allowed by law to meet patient needs," – Hims & Hers CEO Andrew Dudum.
Despite the recent downturn in stock value, Hims & Hers remains optimistic about its weight loss program's potential. The company projects revenue exceeding $100 million by 2025 from this initiative. Notably, Hims & Hers' shares had previously soared by more than 200% last year and have already increased over 100% this year.