Shares of Hims & Hers Health (HIMS 2.58%) are falling on Friday. The company's stock lost 23.2% as of 1 p.m. ET and lost as much as 26.1% earlier in the day. The move comes as the S&P 500 lost 1% and the Nasdaq Composite lost 1.3%.
Hims & Hers, one of the most popular telehealth services in the world, is in danger of losing one of its central revenue sources.
Ozempic is no longer in short supply
The U.S. Food and Drug Administration (FDA) removed semaglutide injection products like the blockbuster drugs Ozempic and Wegovy from its shortage list. The FDA will now begin taking action against "compounders" -- companies that were able to make generic versions of semaglutide drugs due to their shortage -- in the next 60 to 90 days. Only brand-name semaglutide products will be available moving forward unless another shortage occurs.
A big hit to Hims & Hers
Though it doesn't compound them itself, Hims & Hers saw its sales explode over the last year driven in part by its ability to sell compounded semaglutide products through its platform. The FDA's decision means a marked reduction in revenue for the company. The news also comes just as the company announced it had purchased a peptide facility that would have allowed it to compound these medications itself.
However, despite the bad news, Hims & Hers Health's CEO remains hopeful that there are many other personalized weight loss products it can provide through this facility that will continue to drive sales.
