The telehealth company Hims & Hers (HIMS 7.88%), which provides consultations and prescriptions, saw its stock crater by nearly 16% on Feb. 9 after deciding not to move forward with plans to offer a copycat GLP-1 pill.
This decision was made after U.S. Food and Drug Administration last Friday announced its "intent to take decisive steps to restrict GLP-1 active pharmaceutical ingredients (APIs) intended for use in non-FDA-approved compounded drugs that are being mass-marketed by companies -- including Hims & Hers and other compounding pharmacies -- as similar alternatives to FDA-approved drugs."
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Hims & Hers has previously sold an injectable weight-loss treatment that used compounded semaglutide, the active ingredient in Novo Nordisk's Ozempic and Wegovy, which are used to help suppress appetite and aid weight loss. Novo Nordisk then created a version of Wegovy in pill form that would cost $149 per month.
Hims & Hers last week announced a copycat version of the Wegovy pill that would cost $49 for the first month and $99 per month after on a five-month plan. That sent the stock surging last week, but shortly after the announcement, Novo Nordisk announced plans to sue Hims & Hers for patent infringement, which led the stock to give up those gains.
Hims & Hers' stock is now down over 58% in the past year. Is the company toast?
GLP-1 is a big part of Hims & Hers' business
Through the first nine months of 2025, Hims & Hers grew revenue by 74% year over year, driven largely by demand for the company's alternative weight-loss treatments.
The stock shot higher on several occasions in 2025 but has since pulled back, likely due to concerns about the sustainability of the company's revenue from GLP-1 drugs.
Hims & Hers has called Novo Nordisk's lawsuit a "blatant attack" on "millions of Americans who rely on compounded medications for access to personalized care... Once again, big pharma is weaponizing the U.S. judicial system to limit consumer choice."
NYSE: HIMS
Key Data Points
However, the FDA seems serious about cracking down on copycat drugs, and the agency's specific naming of Hims & Hers is not a good sign.
Given the intense demand for GLP-1 drugs and increasing competition, prices for these drugs are likely to come down over time, which would make the business tougher, even if Hims & Hers manages to escape current regulatory and legal issues. Furthermore, the telehealth market, which was a darling during the pandemic, has lost some of its appeal and faces significant competition.
I don't necessarily know if Hims & Hers is toast, but I would avoid the stock right now to let the legal and regulatory concerns play out.
