Telehealth Stock Hims & Hers Surges Post Super Bowl Ad Controversy
HIMS (+27.71%) experienced a significant surge in trading on Thursday following the airing of its Super Bowl ad promoting affordable GLP-1 weight-loss drugs. The ad drew criticism for criticizing the healthcare system and for failing to specify whether the referenced drugs were branded or generic.
Despite these concerns, congressional leaders raised concerns about the omission of safety information and side effects. Notably, the stock has gained over 100% year-to-date and continues to rise above $57 per share.
Stock Movement Influenced by HHS Secretary Approval
The stock's upward trajectory aligns with the US Senate's approval of Robert F. Kennedy Jr. as the new Health and Human Services (HHS) secretary. According to Mizuho's Jared Holz, retail investor interest has been a major factor.
Holz believes that the Kennedy-led HHS will adopt a lenient approach towards GLP-1 manufacturers, provided that the drugs are considered safe. The administration's focus on cost-benefit analysis in the pharmaceutical industry, particularly in preventative healthcare, has contributed to the enthusiasm.
Ongoing GLP-1 Shortages and Compounding Pharmacies
Persistent concerns over GLP-1 shortages have also played a role in the stock's performance. Eli Lilly (LLY) and Novo Nordisk (NVO) continue to invest heavily in production to meet demand.
During the shortage, compounding pharmacies took advantage by producing patented products at lower prices, raising safety concerns. Despite these concerns, telehealth providers like Hims and Ro captured an estimated 20% market share.
Removal of GLP-1 Drugs from Shortage List
The FDA has recently removed Lilly's tirzepatide drugs from the shortage list, but concerns remain about meeting current demand. Despite supply improvements by both LLY and NVO, the ability to meet future needs is uncertain.
Novo's semaglutide drugs remain on the FDA's shortage list, but the company has requested removal based on increased production. This has allowed telehealth providers to continue offering compounded products.