Hims & Hers Stock Jumps On New Discount Weight-Loss Drug Offering

A loophole lets the company create a back-door offering of a generic drug before the patents of Novo Nordisk and Eli Lilly expire.

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Did a generic company just get an “Advance to GO” card in the new weight loss pharmaceuticals gold rush? 

As Novo Nordisk and the other freshly minted kinds of weight-loss drug companies struggle to keep pace with demand, telehealth firm Hims & Hers announced Monday it’s offering a generic version of a GLP-1 injection at a radically reduced cost. Consumers have something of a legal loophole to thank.

Compounding Interest

Popularity can be a double-edged sword. For Novo Nordisk, it’s meant seeing both of its Wegovy and Ozempic drugs stuck on the FDA’s official shortages list since last May. And one pharma company’s crisis is another’s opportunity. With FDA-approved GLP-1 drugs in short supply, the door has been open for competitors to enter the market with a “compounded” version, or drugs that mix certain ingredients to create a copycat version of an already approved drug. In short, it’s allowed Hims & Hers to create a back-door offering of a generic weight loss drug far before the patents of Novo Nordisk and Eli Lilly expire.

That’s great news for the consumers who can’t get a brand-name version, either because of the shortage or the exorbitant price tag:

  • Wegovy, Ozempic, and Eli Lilly’s Zepbound are so costly that some insurers are nixing coverage entirely — a month’s worth of Wegovy injections costs around $1,350 without insurance, about on par with Zepbound.
  • Hims & Hers, meanwhile, will offer their generic copycat for just $199 per month, and an oral medication starting at $79 per month. For now, the drugs won’t be available in all 50 US states.

Copycat Scratch Fever: Compounded drugs don’t need FDA approval, making Hims & Hers offerings a play-at-your-own-risk deal, hopefully with the advice of your doctor. Hims & Hers also isn’t the first firm to step into the weight loss compounded drug market, though the FDA and state health departments don’t closely track compounded drug markets either, making it difficult to know just how many Americans are taking discount Ozempic. Either way, it’s not exactly new territory for the telehealth firm. In December, the company began prescribing off-label versions of closely related diabetes and alcohol-use disorder drugs, and CEO Andrew Dudum said the division is now the fastest grower, expected to generate $100 million in revenue by next year. Investors popped with excitement on Monday, sending Hims’ share price, already up 50% year-to-date as of Friday, up nearly 30%. As usual, helping others skinny down is a great way to fatten up your bottom line.