Hims & Hers sent a shockwave through the pharmaceutical industry on Thursday with its announcement of a weight-loss pill with a $49-a-month introductory price. Its shares ended down anyway.
That pattern is nothing new for investors in the compounding company, an upstart competitor to established drugmakers that became a momentum-stock darling before entering into a downtrend that has seen it shed 60% of its value since mid-October.
Hims announced plans to offer a discounted compounded version of Novo Nordisk’s Wegovy weight-loss pill, which has itself been losing ground to Eli Lilly’s offerings in the thriving market for weight-loss drugs. Hims shares rallied sharply before a pullback that turned into a selloff once Novo threatened legal action.
“Wall Street’s reaction is often based on perception, and the (initial) perception is, $49 is a lot cheaper than what they can get elsewhere,” said Rajiv Leventhal, senior analyst, digital health at eMarketer. But he noted $49 is for the first month, and it would cost $99 afterwards for those who purchase a five-month plan.
The stock surged 14% at the open of trading but ended down 4%. Shares fell a further 4% in after-hours trading after U.S. Food and Drug Administration head Marty Makary said on X that his agency would take “swift action against companies mass-marketing illegal copycat drugs, claiming they are similar to FDA-approved products.” He did not name any drugs.
