Hims & Hers Struggles After the FDA Puts a Ticking Clock on its Weight-Loss Drug

Talk about awkward timing. Hims & Hers spent millions hyping its cheap Ozempic alternative during the Super Bowl earlier this month, only to learn that the FDA would likely be winding down the company’s weight-loss game. Now it’s got a bad case of regulatory indigestion.

Hims & Hers launched its injectable GLP-1s last spring, and the jabs have since punched up its earnings. The millennial-coded healthcare company yesterday reported sales growth of nearly 95% year-over-year to $481 million in the most recent quarter on the back of strong sales of its weight-loss meds, along with a 45% jump in subscribers. But investors are looking forward, not back. Shares of Hims & Hers lost nearly a third of their value after the FDA announced on Friday that semaglutide — a.k.a. the key ingredient in Ozempic and Wegovy — was no longer in an officially designated shortage. The shares managed to claw back some of their value yesterday, rising over 4%.

Ozempiconomy Inflection Point

Novo Nordisk is the only FDA-approved producer of semaglutide drugs, but semaglutide’s status on the national drug shortage list is what allowed Hims & Hers to create alternatives to the original recipe used by Novo Nordisk for its blockbuster drugs, Ozempic and Wegovy.

As demand for the injectable med far outstripped Novo’s ability to fill prescriptions, the key ingredient in Ozempic and Wegovy, semaglutide, has been in a shortage since 2022:

• That shortage status opened the floodgates for rivals who were allowed to sidestep the FDA and make and sell “compounded” semaglutide spinoffs that don’t require the FDA’s approval to mass-produce. 
• This fast-tracked process is intended to meet patients’ needs when the official version is unavailable.

Now that semaglutide’s no longer in shortage territory, the FDA said drug-makers have 90 days to wrap up production of their Novo knockoffs. Hims & Hers CEO Andrew Drudum said Friday that his company will keep selling its drugs as long as they’re legal and will be on the lookout for future shortages. 

Unsaturated isn’t Forever: Post-pandemic, drugmakers were looking for their next big seller as fewer people popped into CVS for covid vaccines. They found it in injectable weight-loss drugs, with prescriptions popping 500% between 2019 and 2023, according to KFF. But after years of pharma companies ramping up factory output and churning out new drugs to meet demand, the Ozempiconomy could be nearing its saturation point. Novo Nordisk forecasts sales growth will slow this year.