Shares of Hims & Hers Health (HIMS) tumbled 14.8% in premarket trading on Monday after the telehealth company said it would stop offering a compounded GLP-1 weight-loss pill that had been priced at $49.
The company disclosed the decision on Saturday, citing threats of regulatory action from the U.S. Food and Drug Administration. The agency had flagged potential violations of federal law, prompting Hims & Hers to remove the product from its offering.
The $49 pill was introduced just last Thursday. The launch initially placed downward pressure on large manufacturers of GLP-1 therapies, with shares of Novo Nordisk (NOVOb) and Eli Lilly (LLY) slipping briefly as the market reacted to the new low-cost entrant.
Following Hims & Hers' announcement that it had discontinued the product, sentiment in related equities shifted. Novo Nordisk shares rose 8% on Monday, marking what the market expected to be the stock's strongest trading day since December, while Eli Lilly gained 2% in premarket activity.
Market performance and context:
- Hims & Hers year-to-date: The stock has fallen roughly 29% so far this year, considerably underperforming the S&P 500's 1% gain over the same period.
- Analyst coverage: LSEG data show 16 analysts covering Hims & Hers with an average rating of "hold" and a median price target of $33, implying about 43% upside from the stock's last closing price.
The sequence of events - a rapid product launch followed by an immediate regulatory response and a quick product withdrawal - translated into heightened volatility for the company's shares and prompted short-term moves in the broader weight-loss drug sector.
Investors and market participants will be watching for any additional statements from Hims & Hers or further communications from the FDA that could clarify the regulatory concerns noted in the agency's warnings. For now, the company has suspended the offering that sparked the episode.