The biggest loser

Yesterday, telehealth firm Hims & Hers Health announced it will stop selling compounded semaglutide, its off-brand alternative to Ozempic and Wegovy, in response to the FDA taking the blue-chip GLP-1 drugs off its shortage list.

The result? Hims & Hers shed 22.32% today, and is down over 32% in the last five days.

Zooming out: Back in May, when Novo Nordisk's hit drugs Ozempic and Wegovy were squarely stuck on the FDA shortage list, Hims & Hers announced its own cheaper, off-brand version, which the FDA greenlit—while still withholding its full stamp of approval. The move was a huge boon for Hims & Hers, pushing its stock up 30% in a single day. But now that the adults are back (Novo Nordisk) and can start producing the real thing at a breakneck pace, the FDA is pulling the plug on the knock-offs.

Meanwhile, Eli Lilly announced today that it's rolling out a higher-dose, cheaper version of weight-loss drug Zepbound in single-dose vials through its direct-to-consumer website, LillyDirect—a move that directly competes with telehealth firms like Hims & Hers.

Should you buy the GLP-1 dip?

But analysts aren’t feeling doom and gloom about Hims & Hers’ growth prospects, despite the major handicap delivered by the FDA this week. For one, the company still plans to sell some versions of its GLP-1 drugs, despite potential legal challenges from Novo and Lilly.

And Hims & Hers, which offers a wide range of services beyond weight loss, including treatments for hair loss, acne, and mental health, just pulled off an impressive Q4: Its revenue increased 95% to reach $481 million, and management predicted Q1 revenue will hit $530 million.

“While we expected 2025 guidance to be above the Street, we’re surprised by the magnitude,” wrote Morgan Stanley equity analyst Craig Hettenbach, who maintained his equal-weight rating and $60 price target—about 53% higher than shares trade today.

But the key issue for the future of the stock is whether it will keep being able to make “personalized dosages” of the GLP-1 drugs. “We learned that more than half of consumers are seeking personalized dosages on the platform and we view the durability of personalized dosages as a key debate over the course of this year,” Hettenbach added.

As for the top dogs, analysts are still broadly bullish on both Novo Nordisk and Eli Lilly.—LB