Shares of Hims & Hers Health plunged a massive 25% on Friday to hit an intraday low of around $49.01.
The massive crash came after the US Food and Drug Administration (FDA) announced the end of the shortage of Novo Nordisk’s weight-loss drugs.
Despite this setback, HIMS stock had surged 43% in the past five days leading up to the FDA’s announcement, making today’s sharp drop a reversal of those recent gains.
HIMS stock was down around 21% to trade at $52.25 at the time of writing.
Novo Nordisk shortage problems resolve
The decision is expected to impact the availability of cheaper, compounded versions of Ozempic and Wegovy that telehealth companies like Hims & Hers Health have been offering.
The resolution could limit how telehealth programs provide cheaper compounded versions of weight-loss and diabetes drugs, coming two months after regulators stated there was no shortage of Eli Lilly’s treatments.
Compounded drugs—custom formulations made by mixing or altering ingredients—have surged in demand in the US due to tight supplies of blockbuster medications from Novo Nordisk and Eli Lilly.
Regulations permit compounding pharmacies to replicate brand-name drugs only when shortages exist and prohibit them from producing these drugs “regularly or in inordinate amounts.”
Companies such as Hims & Hers offer compounded semaglutide, the active ingredient in Ozempic and Wegovy.
While pharmacies may still create alternative formulations by adjusting doses or modifying ingredients, the decision is a setback for companies like Hims & Hers Health, which had benefited from offering these compounded versions.
Recent acquisitions from Hims and Hers
In separate news, the company today announced the acquisition of a US-based peptide facility in California, further verticalizing its long-term ability to deliver personalized medications.
The acquisition aims to enhance supply chain durability and meet the rising demand for personalized healthcare solutions in the US.
This move follows the company’s previous acquisitions of 503A and 503B facilities, reinforcing its domestic manufacturing capabilities and improving oversight on cost, availability, and quality.
Additionally, the peptide innovation capabilities from this acquisition will allow Hims & Hers to explore preventive health, metabolic optimization, cognitive performance, and recovery science in the coming years.
Earlier in the week, Hims & Hers Health announced the acquisition of Trybe Labs, a New Jersey-based at-home lab testing facility, further expanding its diagnostic and personalized healthcare capabilities.
The acquisition will enable Hims & Hers to offer at-home blood draws and more comprehensive pretreatment testing, providing an alternative to established blood-drawing services like Labcorp and Quest Diagnostics.
While financial terms were not disclosed, the company stated that the deal was funded through cash on hand.
The acquisition will enhance testing capabilities for LDL cholesterol, lipoprotein(a), cholesterol, and apolipoprotein.
It will also support expanded care access for conditions such as low testosterone, perimenopausal and menopausal support.
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