Hims & Hers Health Inc. (HIMS) plunged over 25% in Tuesday's pre-market session, following the FDA's decision to remove the popular weight loss drugs Wegovy and Ozempic from the shortage list last week.
The telehealth company has been a major beneficiary of selling compounded alternatives to these drugs when they were in short supply. However, with the shortage now resolved, compounding pharmacies that supplied Hims & Hers will be forced to halt production of the knockoffs by May 22nd.
This development has cast doubt on Hims & Hers' ability to sustain the robust growth in its weight loss drug business, which was a key revenue driver. While the company plans to transition to offering oral weight loss solutions and generic liraglutide, analysts remain skeptical about its lofty 2025 sales forecast for the segment, citing concerns over slower adoption of the new offerings.
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