Hims & Hers Health Faces Regulatory Challenges Amid Weight-Loss Pill Controversy

Hims & Hers Health, a telehealth company, is navigating significant regulatory scrutiny following its announcement to launch a compounded version of Novo Nordisk's Wegovy weight-loss pill. The company, in partnership with Strive Pharmacy, initially planned to sell this compounded oral semaglutide pill for $49. However, the U.S. Food and Drug Administration (FDA) referred Hims to the Department of Justice due to concerns over the legality of its compounded products, leading to a halt in distribution. Strive Pharmacy has indicated it will wait for regulatory clarity before reintroducing the product.

Reuters

The regulatory challenges have raised concerns among investors regarding Hims' financial outlook. Following the announcement of the FDA's actions, analysts revised their share price targets downward, reflecting uncertainty about the company's ability to sustain its growth trajectory. Hims CEO Andrew Dudum has expressed confidence in the company's capacity to adapt its business model, even if compounded GLP-1 sales are restricted. Despite predicting a revenue growth of over 15% in 2026, the company faces immediate financial pressures, including a projected $65 million headwind in the first quarter of 2026.

Hims expansion may not come in time for risky GLP-1 business

Hims is also pursuing international expansion, having recently acquired the UK-based Zava and announced plans to purchase Australia's Eucalyptus for up to $1.15 billion. These acquisitions aim to diversify Hims' offerings beyond weight-loss drugs, as both companies provide access to various health treatments. However, analysts caution that the costs associated with international operations may hinder profitability in the short term.

Hims expansion may not come in time for risky GLP-1 business

Industry experts have raised concerns about the potential for the FDA to add semaglutide to its "do-not-compound" list, which would severely limit Hims' ability to produce its weight-loss pill. Rosalie Hoyle, a research scientist, anticipates that the FDA may update its compounding guidance this year, potentially impacting Hims' operations. Jailendra Singh, an analyst at Truist, highlighted the risks associated with ongoing federal investigations, suggesting that additional regulatory findings could further complicate Hims' situation.

Hims expansion may not come in time for risky GLP-1 business

Hims & Hers Health has refrained from commenting on the ongoing litigation with Novo Nordisk and the regulatory scrutiny it faces. The company has emphasized its commitment to adjusting its business model to meet patient demands, even in the face of potential restrictions on compounded GLP-1s.

Hims expansion may not come in time for risky GLP-1 business

• “We see a lot of question marks on (Hims), including litigation with Novo Nordisk and potential regulatory changes to the compounding industry,” — Kadyn Kim, Analyst at Morningstar

Hims expansion may not come in time for risky GLP-1 business

• “The FDA could use it as an avenue to identify potential safety risks of using the active ingredient in compounding,” — Rosalie Hoyle, Research Scientist at Avalere

Hims expansion may not come in time for risky GLP-1 business

There is uncertainty regarding the timeline for regulatory decisions and their implications for Hims' business model. While some analysts predict a lengthy resolution to the ongoing legal and regulatory challenges, others suggest that Hims may need to pivot quickly to maintain investor confidence and market position.

Hims expansion may not come in time for risky GLP-1 business