Shares of Hims & Hers Well being (NYSE: HIMS) surged on Tuesday, closing the session up 5.25% after having been up by as a lot as 14% earlier. That bounce got here because the S&P 500 and Nasdaq Composite confirmed extra modest actions.
The day’s acquire was powered by the telehealth firm’s announcement of plans to promote the blockbuster weight reduction drug Zepbound on its platform.
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Again within the weight reduction drug enterprise
Hims & Hers revealed Tuesday that it’s going to start providing branded variations of Eli Lilly‘s tirzepatide — the lively ingredient in weight reduction drug Zepbound and diabetes medication Mounjaro. The corporate can even supply biosimilar variations of Novo Nordisk‘s diabetes drug liraglutide. It joins competitors Teladoc and LifeMD in providing Zepbound.
Hims & Hers had beforehand provided compounded variations of semaglutide — the GLP-1 drug marketed as Ozempic and Wegovy — which it and different compounding pharmacies have been allowed to do legally as a result of semaglutide was formally in a scarcity. Due to that loophole, Hims & Hers’ revenues surged. However final month, the Meals and Drug Administration (FDA) declared that the scarcity was over, which compelled them to carry these gross sales to a detailed.
Hims & Hers is nicely positioned in a rising market
The lack of its semaglutide income hit Hims & Hers laborious, and the flexibility to once more supply an analogous drug ought to be a boon to its high line. That being mentioned, the margins on these branded medication will likely be a lot tighter, and their larger retail costs imply that the corporate will probably wrestle to promote as a lot of them.
Nonetheless, the remainder of the enterprise is robust, and Hims & Hers has a stage of name recognition and market positioning that makes it the envy of its friends. There are valuation points, nonetheless, even after the numerous decline within the inventory worth following the lack of its skill to compound semaglutide. Earlier than investing within the inventory, I’d wait to see how a lot of its earlier weight reduction drug enterprise the corporate can get well.
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Johnny Rice has no place in any of the shares talked about. The Motley Idiot recommends Novo Nordisk. The Motley Idiot has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.
