Hims & Hers Health, a telehealth company, experienced a surge in its stock price after announcing a new weight-loss treatment starting at $199 a month. This treatment will compete with Novo Nordisk’s Wegovy and Ozempic in the weight-loss market, which is currently facing shortages of branded treatments. Hims shares closed at a three-year high of $18.60, marking a significant increase since the start of the year when they were trading at $9.64. The company, known for providing affordable alternatives to brand-name drugs, has seen its shares nearly double in price in a short period.
The announcement of Hims’ new weight-loss treatment, which utilizes the same active ingredient as Ozempic and Wegovy, led to the spike in share prices. The treatment is priced significantly lower than its competitors, with Wegovy costing $1,350 per month without insurance. Despite the high cost of branded treatments, Novo Nordisk has reported that 80% of insured U.S. patients taking Wegovy pay under $25 a month, though insurance coverage for weight-loss treatments is limited. This new offering from Hims comes at a time when there is a high demand for GLP-1 treatments and ongoing shortages in the market.
Novo Nordisk and Eli Lilly and Company, the leading players in the weight-loss treatment market, are expected to continue dominating despite the shortages. These companies have sold over $7.3 billion worth of GLP-1 drugs in the first quarter of the year and are increasing their manufacturing capacity to meet demand. Hims, on the other hand, reported $278.2 million in revenue in the first quarter, exceeding expectations and showing a 46% year-over-year growth. The company, which primarily offers personalized subscriptions to personal care and sexual health products, has been expanding into weight-loss treatments to capitalize on the market opportunities.
Hims’ foray into weight-loss treatments is supported by regulations allowing for increased production of copycat drugs during shortages, a practice known as “compounding.” Unlike branded medications, compounded drugs are not approved by the FDA and do not undergo the same quality and safety reviews. However, Hims’ new treatment is positioned to offer a more affordable option compared to existing treatments in the market. The company’s platform currently serves 1.7 million subscribers, underscoring its growing presence in the telehealth space.
As the weight-loss market continues to evolve and face challenges such as shortages of treatments, companies like Hims & Hers Health are seizing the opportunity to offer innovative solutions at competitive prices. The surge in Hims’ stock price following the announcement of its new weight-loss treatment reflects investor optimism in the company’s growth potential. With the increasing demand for weight-loss treatments and the ongoing shortages in the market, Hims’ entry into this space could provide consumers with more accessible options for managing obesity and Type 2 diabetes.
