By Elsa Ohlen

Telehealth company Hims & Hers is planning to launch a generic version of Novo Nordisk's diabetes drug as soon as 2025. The announcement came along with the company's strong earnings report late Monday.

The stock rose 4.3% to $21.65 on Tuesday, after initially rising as much as 12% in premarket trading.

The company plans to bring liraglutide -- Novo's first-generation GLP-1 drug to treat Type 2 diabetes, sold under the name Victoza -- to its platform by 2025, CEO Andrew Dudum said.

"We have already confirmed a core supplier for this addition, and over the next few months expect to finish completing test and batch validation," Dudum added.

GLP-1 agonists are a class of medications that can help manage Type 2 diabetes and obesity by helping to control appetite and blood sugar levels.

Booming demand for newer generation GLP-1 drugs for weight loss -- including Novo's Wegovy and Eli Lilly's Zepbound -- led to shortages that enabled drug compounders like Hims & Hers to produce their own versions of the drugs, despite patent protection.

Novo's drugs are still on the U.S. Food and Drug Administration's drug shortage list, but all doses of Wegovy and Ozempic are now listed as available.

The FDA said on Oct. 2 that Lilly's blockbuster drugs Zepbound and Mounjaro are no longer in shortage, but the agency has since said it will "re-evaluate" that assessment. If the shortage is in fact declared over, drug compounders like Hims & Hers will likely be forced to stop producing compounded versions under current legislation. Some telehealth firms have been lobbying to be allowed to continue selling the drugs, even after the shortage ends.

Novo shares fell 1.3% and Lilly stock slipped 0.2% early Tuesday.

Hims & Hers posted third-quarter revenue of $401.6 million, up 77% from the same period last year. Earnings per share came in at 32 cents, well above estimates of 11 cents per share, according to analysts polled by FactSet.

The company also raised its full-year 2024 revenue guidance to a range of $1.460 billion to $1.465 billion, up from a previous range between $1.37 billion and $1.40 billion. It raised its outlook for adjusted earnings before interest, tax, depreciation and amortization, or Ebitda, to a range between $173 million and $178 million, up from between $140 million and $155 million, previously.

Through Monday's close, Hims & Hers stock was up 133% so far this year.

Write to Elsa Ohlen at elsa.ohlen@barrons.com

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November 05, 2024 11:38 ET (16:38 GMT)

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