Hims & Hers Stock Soars Amid GLP-1 Drug Controversy
Telehealth stock Hims & Hers (HIMS) surged over 24% on Thursday following its Super Bowl ad promoting affordable GLP-1 weight-loss drugs. The ad drew criticism for its critique of the healthcare system without explicitly stating whether the drugs being offered were brand-name or generics.
Concerns were raised by congressional leaders over the ad's omission of potential safety issues and side effects. Despite this, the stock has rallied and is now up 100% year-over-year, trading at over $57 per share.
The surge in HIMS is attributed to optimism surrounding the potential approval of Robert F. Kennedy Jr. as Secretary of Health and Human Services (HHS). Mizuho's healthcare expert Jared Holz believes Kennedy's leadership will adopt a lenient stance towards GLP compounders if their products are deemed safe.
HIMS and other telehealth providers have benefited from GLP-1 shortages faced by market leaders Eli Lilly (LLY) and Novo Nordisk (NVO). Compounding pharmacies have been able to produce and sell lower-priced versions of the patented drugs.
Lilly's tirzepatide drugs have been removed from the FDA's shortage list, but concerns remain about meeting current demand. Novo's semaglutide drugs are still on the list, but the company is seeking removal based on increased production.
Telehealth providers like HIMS and Ro continue to offer compounded GLP-1 products, benefiting from the ongoing supply issues. The industry remains bullish on telehealth as concerns over GLP-1 shortages persist.