Hims stock dropped sharply Friday after the U.S. Food and Drug Administration said the shortage of widely-used weight-loss and diabetes drugs has been resolved.
The FDA website indicated that the shortage of Novo Nordisk's Ozempic and Wegovy has ended. The announcement is bad news for Hims & Hers, a compounding pharmacy that makes a knockoff version of Wegovy.
In December, the FDA said Eli Lilly (LLY) drugs Mounjaro and Zepbound were no longer in shortage.
↑ X NOW PLAYING Nvidia Earnings Preview: Blackwell, DeepSeek And Big ExpectationsHims (HIMS) stock crashed nearly 20% to 53.38 in morning trades after hitting a record 72.98 on Wednesday. Shares of Novo Nordisk (NVO) rallied 5.1% to 88.03, just below a long-sliding 50-day line. Eli Lilly stock rose 1.7% to 888, near an 889.36 handle buy point.
Hims stock, which has rallied more than 120% this year, is on track to record its first weekly loss in six weeks, according to IBD MarketSurge. The shares have had a strong Relative Strength rating of 99.
The news underlines the role played by compounders, companies allowed to create knockoffs of drugs to offset shortages, in the fast-growing weight-loss drugs industry.
Hims & Hers also recently took some heat for a Super Bowl ad that does not include any warnings about the side effects of Wegovy.
Him & Hers will report Q4 results on Monday.
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