Growth in Telehealth Stocks: Hims & Hers Soars After Super Bowl Ad
Hims & Hers (HIMS) witnessed a significant 24% surge in stock price following its controversial Super Bowl advertisement promoting affordable GLP-1 weight-loss treatments. The ad highlighted the inequity in healthcare pricing while promoting Hims & Hers' cost-effective weight-loss options.
Political Influence and Market Dynamics
The advertising controversy elicited responses from pharmaceutical companies and raised concerns among congressional leaders regarding the omission of safety information in the ad. However, the stock's rise has continued, fueled by retail investor interest and the recent Senate approval of Robert F. Kennedy Jr. as Health and Human Services (HHS) Secretary.
Mizuho's healthcare expert Jared Holz believes the HHS under Kennedy's leadership will adopt a less restrictive approach towards GLP-1 compounders, provided safety concerns are addressed. Holz also noted the administration's emphasis on cost-benefit analysis in the pharmaceutical industry, particularly in the realm of preventive health.
Impact of GLP-1 Shortages
Ongoing concerns over GLP-1 shortages have contributed to the enthusiasm surrounding Hims & Hers and other telehealth providers. Market leaders Eli Lilly (LLY) and Novo Nordisk (NVO) are investing heavily to increase production and meet demand.
When GLP-1 drugs were in short supply, compounding pharmacies stepped in to produce patented products at a lower cost. Despite safety concerns, consumers flocked to telehealth platforms like Hims & Hers for these compounded drugs, capturing an estimated 20% of the market.
FDA Updates and Telehealth Options
Recently, the FDA removed Lilly's tirzepatide drugs, Mounjaro and Zepbound, from its shortage list. However, concerns persist about the company's ability to meet current demand.
Meanwhile, Novo's semaglutide drugs, Ozempic and Wegovy, remain on the FDA's shortage list. Despite this, the company is seeking removal based on increased production. This situation allows telehealth providers like Hims & Hers to continue offering compounded products until supply constraints ease.