Hims & Hers Health (NYSE: HIMS) has halted its short-lived program to distribute a compounded semaglutide pill, the telehealth provider said, after engaging with stakeholders across the industry. The company had introduced the weight-loss option with a planned price of $49 per month but reversed course following indications from the U.S. Food and Drug Administration that it would take action against non-FDA-approved GLP-1 drugs.
The company's stock was trading at $23.02 and has declined by nearly 13% over the past week, according to InvestingPro data cited in public reporting. Management framed the change as the result of conversations with regulators and other industry participants rather than as an abrupt policy shift.
"Since launching the compounded semaglutide pill on our platform, weve had constructive conversations with stakeholders across the industry. As a result, we have decided to stop offering access to this treatment."
BTIG analyst David Larsen, in a recent research note, kept a Buy rating on Hims & Hers with a $60.00 price target despite the withdrawal of the pill. That price target implies substantial upside versus current trading levels. InvestingPro data referenced in coverage shows analyst price targets for the company ranging from $16.50 to $68.00.
Larsen's note highlighted growing FDA enforcement activity aimed at compounding pharmacies that handle GLP-1 therapies. That enforcement could include curbs on access to certain active pharmaceutical ingredients and additional regulatory measures affecting compounding operations.
Even as the company navigates regulatory friction, the analyst commentary emphasized Hims & Hers' underlying business metrics. The firm remains profitable and reported revenue growth of 78% year-over-year, a figure called out in research coverage. InvestingPro analysis also flagged the stock as currently in oversold territory and noted the availability of more than 15 additional ProTips for subscribers.
Separately, Hims & Hers has moved forward with a different clinical initiative: the rollout of a multi-cancer screening blood test developed in collaboration with GRAIL, Inc. The test is designed to detect signals for more than 50 types of cancer prior to symptom onset, with a stated aim of improving early detection for cancers that lack routine screening options, including pancreatic and ovarian cancers.
The FDA's stated intent to restrict GLP-1 active pharmaceutical ingredients in non-FDA-approved compounded drugs was a proximate factor in Hims & Hers' decision to discontinue the $49 GLP-1 pill, the company said. The agency flagged potential federal law violations tied to such products, prompting the company to remove access to the treatment from its platform.
Analyst responses to the sequence of events have varied. BofA Securities reduced its price target for the company from $26.00 to $21.00 and retained an Underperform rating. Morgan Stanley left its rating unchanged at Equalweight while keeping a $40.00 price target. The differing reactions illustrate a split in how market observers are weighing regulatory risk against growth and profitability metrics.
The company's latest moves reflect efforts to balance product innovation with compliance in a regulatory environment that is tightening around compounded GLP-1 therapies. Market participants will likely watch both regulatory guidance and the companys progress on its cancer-screening initiative as indicators of its strategic direction.
Top takeaways
- Hims & Hers discontinued its compounded semaglutide pill program after discussions with industry stakeholders and in light of FDA signals on enforcement.
- BTIG maintained a Buy rating with a $60 price target even as other firms adjusted price targets and ratings.
- The company continues to report strong revenue growth and has launched a multi-cancer screening test in collaboration with GRAIL, Inc.
Sectors affected: Telehealth services, consumer healthcare, regulatory oversight of compounding pharmacies.