MW Hims & Hers shares rally on results, but execs say GLP-1 drug shortage 'is not abating'

By Bill Peters

'In the last two months, a total of nearly 80,000 individuals reported through our platform that they have been unable to obtain name-brand GLP-1s,' company says

Shares of Hims & Hers Health Inc. rallied after hours on Monday after the wellness platform bumped its full-year sales forecast higher, as its efforts to offer more personalized care and more weight-loss drugs continue to draw subscribers.

The results come as those drugs, like Wegovy and Ozempic, explode in popularity, leading to shortages as well as greater competition. Executives on Monday said those supply constraints were "not abating," and they said securing "consistent supply" remained difficult.

Hims & Hers $(HIMS)$ - known for selling medications targeting hair loss, erectile dysfunction, anxiety and other conditions - said it expects full-year sales of $1.46 billion to $1.465 billion. That's up from a forecast in August for $1.37 billion to $1.4 billion.

The company also said it expects fourth-quarter revenue of $465 million to $470 million, above Wall Street's expectations for $421 million.

Shares were up 7.4% after hours on Monday. As of Monday's close, the stock was up 133.3% so far this year.

"Our execution against a strategy that brings customers convenient, transparent, and affordable access to care designed specifically for them is allowing us to reach millions of individuals across the country," Chief Executive Andrew Dudum said in a statement.

Hims & Hers has begun selling GLP-1 drugs - such as brand names like Ozempic and compounded medications that can be customized - which have been used for weight loss. In its letter to shareholders on Monday, the company said it would offer access to Liraglutide, the first generic GLP-1 on its platform, next year.

Still, management said that tens of thousands of people weren't able to buy the most well-known of those drugs.

"What we are also seeing reported by our customers is that the shortage of available name-brand GLP-1s in this country is not abating," executives said in Hims & Hers' letter to shareholders. "In the last two months, a total of nearly 80,000 individuals reported through our platform that they have been unable to obtain name-brand GLP-1s, and we have seen the pace of these reports accelerating over time."

"While the regulatory landscape continues to evolve, the data we are seeing indicates that the shortage is continuing, and we are actively communicating with state and federal legislative and regulatory agencies to provide them with information about what customers on our platform have been experiencing," they continued.

The Food & Drug Administration last week signaled that supplies of those drugs, while still tight, have opened up somewhat for Novo Nordisk $(NVO)$, the drug maker that manufactures Wegovy and Ozempic. The company last year said it would invest more than $6 billion in more manufacturing capacity.

But Truist analysts last week said the FDA's announcement likely dinged Hims & Hers' share price.

"Shares have responded more to various external factors and developments including the noise around GLP-1 drugs supply shortage and the role/viability of compounders in such a world, with relatively less focus being on the ongoing trends and demands for its solutions," those analysts said.

"This volatility underscores investors' concerns with respect to the sustainability of the company's compounded GLP-1s related revenue stream," they said.

On Monday, Hims & Hers' chief financial officer, Yemi Okupe, said that outside GLP-1 demand, the company's business was still strong. Subscriber growth "excluding contributions from our compounded GLP-1 solutions" jumped 40% year over year during the third quarter, he said.

The company finished the quarter with 2 million subscribers. Revenue jumped 77% year over year to $401.6 million, above FactSet forecasts for $382 million. Hims & Hers earned 32 cents a share during the quarter, above estimates for 11 cents.

-Bill Peters

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November 04, 2024 18:28 ET (23:28 GMT)

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