Hims & Hers Stock Plunges on Semaglutide Suspension
Hims & Hers (HIMS) shares plummeted 27% after the company announced it would cease offering compounded versions of weight-loss drugs.
Despite exceeding revenue expectations in the fourth quarter, investors reacted negatively to the potential revenue loss from the discontinued GLP-1 business.
CFO Yemi Okupe downplayed concerns, emphasizing that the weight-loss segment accounted for a small portion of revenue. He highlighted the company's 2 million non-weight-related subscribers and projected $1.5 billion in revenue from non-GLP-1 sources in 2024.
Hims & Hers intends to comply with regulatory requirements and remove semaglutide dosages from its platform. Despite this, Okupe expressed confidence in the company's weight-loss offerings.
The company's full-year revenue forecast of $2.3 billion to $2.4 billion surpassed Wall Street estimates of $2.09 billion. However, Wall Street's reaction remains cautious.
Since 2022, the industry has faced a semaglutide shortage, contributing to Hims & Hers' stock surge last year. However, the FDA has recently announced the resolution of the shortage and plans to target compounders.
Despite the decline, Hims & Hers shares remain up 48% year-to-date. Novo Nordisk (NVO) and Eli Lilly (LLY) shares gained after the FDA announcement and the latter's cost-reduction announcement for its weight-loss prescription.