Shares of Hims & Hers Health (HIMS) tumbled 15% yesterday after Novo Nordisk (NVO) announced it was cutting the price of its GLP-1 weight-loss drug Wegovy by more than half. The move obliterates the direct-to-consumer healthcare platform’s ability to continue selling personalized dosages of its GLP-1 knockoff.
Although Hims & Hers was going to be forced to stop selling its GLP-1 compound after the FDA ruled there was no longer a shortage of the weight-loss therapy, it would be able to continue selling different dosages than Novo Nordisk’s Wegovy. That was its plan to stay in the market, but the Danish pharmaceutical giant may have just ended that effort.
Hims & Hers found a way to enter the wildly popular weight-loss market by selling compounded versions of GLP-1 drugs from third-party manufacturers. Because there was a shortage of the treatments, FDA rules allow for such knockoff versions to be sold. While they are made from the same active ingredient, they have not been tested and the FDA recommends people not take them when there is sufficient supply of the original available.
Last month, the FDA and Novo Nordisk said there was now plenty of Wegovy and Ozempic to meet current and future demand. It meant Hims & Hers would have just a short period to sell off its remaining supply before being shut down.
However, separate rules allow for personalized dosages of the drugs that are different than the dosages Novo Nordisk sells. It would allow for Hims & Hers to keep selling its compounded version.
Novo Nordisk’s latest announcement, though, cuts the price of Wegovy to around $500 a month, a significant discount from the original $1,400 price point for a 28-day supply. It is likely cheap enough that consumers will buy the original formulation and not Hims & Hers’ compounded one.
HIMS stock continues to fall in pre-market trading this morning, dropping another 3.5%. The stock has now lost over half its value from its high point hit just last month.
