Shares of Hims & Hers Health Inc. (HIMS) plummeted 25.76% in the pre-market trading session on Friday, after the U.S. Food and Drug Administration announced that the shortage of Novo Nordisk's popular weight-loss and diabetes drugs Ozempic and Wegovy has been resolved.
The resolution of the shortage could potentially restrict how telehealth programs like Hims & Hers offer cheaper versions known as compounded drugs, which have seen a boom in demand due to the tight supply of Novo Nordisk's treatments. Regulations allow compounding pharmacies to copy brand-name medicines only when they are in short supply.
With the shortage ending, companies offering compounded versions of semaglutide, the active ingredient in Ozempic and Wegovy, could face challenges. This development poses a threat to Hims & Hers, which offers compounded semaglutide as an alternative to the brand-name drugs.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.