Hims & Hers Stock Tumbles 26% as FDA Ends Drug Supply

Hims & Hers Health saw its stock plunge 26% to $44.71 after the FDA announced the end of the semaglutide shortage. You’ll find this drop particularly significant given the company’s 600% growth last year. The FDA’s decision gives compounding pharmacies 60-90 days to stop producing weight loss drugs, directly impacting Hims & Hers’ business model. While some analysts maintain optimism, others express concerns about the company’s future without its GLP-1 revenue stream.

Shares of telehealth provider Hims & Hers (HIMS) plunged 26% on Thursday after the FDA declared an end to the semaglutide shortage, threatening the company’s lucrative weight loss drug business. The stock, which had soared over 600% in the past year, fell to $44.71 amid intense market volatility as investors struggled with new FDA regulations that could notably impact the company’s revenue stream. The company’s remarkable growth from 600,000 subscribers to 2 million since 2021 made the stock decline particularly striking. The company has been operating under rule 503B which allows mass production of compounded drugs during shortages.

The FDA’s announcement marked a critical turning point for companies offering compounded versions of popular weight loss drugs like Ozempic and Wegovy. With the shortage officially over, compounding pharmacies now have a 60-90 day grace period to cease production of these medications. This decision particularly affects Hims & Hers, which had built a substantial business around offering lower-priced compounded versions of these drugs. Deutsche Bank analysts maintained optimism despite the setback, having recently raised their price target to $33.

The impact on Hims & Hers could be severe, as GLP-1 medications were projected to account for more than half of the company’s revenue in Q2 2025. CEO Andrew Dudum responded to the news by emphasizing the company’s commitment to providing personalized treatments “as allowed by law” while monitoring potential future shortages. He also pointed to Novo Nordisk‘s acknowledgment of ongoing capacity limitations as a potential silver lining.

The market’s reaction extended beyond Hims & Hers, affecting other digital health companies like Ro, Noom, 23andMe, and WeightWatchers. Meanwhile, traditional pharmaceutical companies Novo Nordisk and Eli Lilly saw their stocks rise, with Novo Nordisk gaining 5% on the news. The company’s recent acquisition of a peptide facility aims to strengthen its position in personalized healthcare delivery despite current market challenges. The shift is expected to redirect customers back to branded drugs, intensifying competition in the weight loss drug market.

Analysts have begun reassessing their outlook on Hims & Hers. While BTIG had previously raised its price target from $35 to $85, Bank of America maintained an “underperform” rating despite raising its target to $21. The main concern centers on the company’s overreliance on GLP-1 products and the potential for notable revenue decline in upcoming quarters.

As Hims & Hers prepares to report its Q4 and full-year 2024 results on February 24, 2025, investors keenly await details about the company’s strategy to navigate these challenges. The company is exploring personalized dosing as a potential legal pathway forward, while also focusing on expanding its product offerings beyond weight loss medications.

However, investor sentiment remains mixed as questions linger about the company’s ability to maintain its growth trajectory without its previously successful GLP-1 business model.