FDA Slams Hims & Hers With A Warning Letter. Investors Slam Hims Stock.
Hims stock toppled Tuesday after the Food and Drug Administration issued the telehealth giant a warning letter regarding its knockoff version of Novo Nordisk's (NVO) semaglutide.
The Sept. 9 letter notes that Hims & Hers Health (HIMS) markets compounded semaglutide on its website. Compounded drugs use the same active ingredient as branded drugs but are often available at a much lower cost.
On its website, Hims claims its compounded product uses the "same active ingredient as Ozempic and Wegovy," which Novo sells as treatments for type 2 diabetes and obesity. The compounded drug uses "clinically proven ingredients," the agency said.
"Compounded drug products are not FDA-approved," the letter said. "Your claims imply that your products are the same as an FDA-approved product when they are not. As a result, these claims are false or misleading and your products are therefore misbranded."
In response, Hims stock sank 5.7% to 50.87 on today's stock market. Shares skidded to a floor at their 50-day moving average, according to MarketSurge.
Shares of weight-loss giants Eli Lilly (LLY) and Novo Nordisk jumped a respective 2.8% and 2.1%, though the duo also received warning letters on Sept. 9. The FDA alleges the duo launched "false and misleading" advertising videos.
The Pressure On Hims Stock
Hims & Hers Health is a telehealth giant with a compounding business. The company sells skin care, sexual health and hair-loss products. But Hims became a household name when the company launched its compounded semaglutide in May 2024.
At the time, branded semaglutide was in shortage, meaning compounders could step in to help fill the supply gap. But the FDA determined the shortage was over in February this year. Now, Hims is leaning on a loophole that allows it to sell personalized doses of semaglutide. Novo, which has cut its outlook multiple times this year, is trying to legally fight the compounders.
The FDA's letter gives Hims & Hers 15 days to respond — to either address the alleged violations or to provide evidence its products aren't violating any laws.
A representative of Hims & Hers didn't immediately return a request for comment from Investor's Business Daily.
Hims stock has been on something of a roller coaster this year. Shares hit a record high near 73 in February, but pulled back near 24 in April. Hims shares climbed back above 70 in July, but toppled to near 41 in more recent action. As of Monday's close, Hims stock has risen 32% from that Sept. 2 low point.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
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