Telehealth provider Hims & Hers Health announced an expansion of its weight-loss offerings to include a compounded oral version of semaglutide marketed as Wegovy. The launch has drawn scrutiny from industry observers who say the product raises legal questions because Novo Nordisk’s branded semaglutide does not currently appear to be in short supply.
Wolfe Research described the development as "a new twist to the obesity story," noting that the legal justification for pharmaceutical compounding typically depends on a shortage designation. As of February 2025, semaglutide was not listed on the U.S. Food and Drug Administration’s current drug shortage list, the agency list that is often cited as the statutory basis for compounding alternatives.
Despite the absence of an active shortage designation for semaglutide, Wolfe Research observed that compounding has remained "a pervasive influence in the injectable landscape." The firm highlighted that compounding activity continued even after the FDA determined that Eli Lilly’s Zepbound and Mounjaro, together with Novo Nordisk’s Wegovy and Ozempic, were no longer in shortage.
Market participants have pointed to the scale of compounded GLP-1 usage as an important variable. Novo Nordisk’s management has said more than one million people are currently using compounded GLP-1 agents, but Wolfe Research warned that the compounding market is fragmented and therefore difficult to measure accurately.
Analysts and market data referenced in recent commentary also stressed the performance of major pharmaceutical players in the obesity drug market. InvestingPro data cited by observers shows Eli Lilly with a market capitalization of $914 billion and reported revenue growth of 44.7% over the trailing twelve months. InvestingPro analysis further projects that Eli Lilly will post about 25% revenue growth in fiscal 2026, reflecting the company’s exposure to the expanding weight-loss drug category.
Recent corporate financials for Eli Lilly were presented as indicative of the sector’s momentum. For the fourth quarter of 2025, Eli Lilly reported earnings per share of $7.54, outpacing a forecast of $7.20, and revenue of $19.3 billion, versus a forecast of $17.87 billion. The company issued fiscal 2026 guidance that calls for revenues in the range of $80 billion to $83 billion and non-GAAP earnings per share between $33.50 and $35.00, numbers that surpass consensus estimates of roughly $78 billion in revenue and $33.09 in earnings per share.
Broker commentary has reinforced investor confidence in Eli Lilly’s positioning. Deutsche Bank reiterated a Buy rating and maintained a $1,200 price target, citing confidence in the company’s 2026 guidance. Truist Securities also kept a Buy rating and a $1,281 price target, citing Eli Lilly’s leadership in obesity treatments and pointing to promising data for Retatrutide. Truist projected that worldwide peak revenues from obesity treatments could reach $78 billion by 2036.
In the near term, the Hims & Hers announcement brings regulatory and market structure questions to the fore. The development underscores the persistence of compounding in the GLP-1 and obesity-treatment landscape even as established manufacturers report robust sales and outlooks. Analysts and market watchers say uncertainty about the true size of compounding activity and the legal basis for compounded oral semaglutide will be issues to follow as the product rolls out.
Summary
Hims & Hers has introduced a compounded oral Wegovy pill, prompting legal scrutiny because semaglutide was not on the FDA’s drug shortage list as of February 2025. Wolfe Research flagged the move as noteworthy, noting compounding remains common in the injectable market. Separately, Eli Lilly’s strong recent results and upbeat guidance have drawn bullish analyst support.
Key points
- Hims & Hers launched a compounded oral semaglutide product marketed as Wegovy, raising legal questions given the lack of an FDA shortage designation for semaglutide.
- Wolfe Research highlights that compounding continues to shape the injectable GLP-1 market, while Novo Nordisk reports over one million users of compounded GLP-1 agents but the market remains fragmented.
- Eli Lilly shows strong financial momentum: sizeable market cap, substantial trailing revenue growth, robust Q4 2025 results, and fiscal 2026 guidance that exceeded consensus, prompting Buy ratings and high price targets from major brokerages.
Risks and uncertainties
- Regulatory risk - The legal basis for compounding an oral semaglutide product may be questioned given semaglutide was not on the FDA shortage list as of February 2025; this affects the pharmaceutical and telehealth sectors.
- Market transparency risk - The size and impact of the compounded GLP-1 market are difficult to assess due to fragmentation, introducing uncertainty for investors and competitors in the obesity treatment market.
- Reputation and commercial risk - The persistence of compounding despite prior FDA shortage rulings could influence prescribing, distribution, and competitive dynamics across pharmaceutical manufacturers and telehealth providers.