Shares of online telehealth company Hims & Hers (HIMS) declined on Monday after a top U.S. health official criticized the company’s Super Bowl ad from February. According to a statement from FDA Commissioner Martin Makary published in the medical journal JAMA, the ad broke federal rules by promoting weight-loss treatments without mentioning potential risks.
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He highlighted that federal law mandates a “fair balance” of both benefits and side effects in prescription drug advertisements. He also pointed to a significant decline in FDA oversight, noting the agency’s warning letters have dropped from hundreds per year in the late 1990s to zero in the last year and only one in 2023.
In its defense, a spokesperson for Hims & Hers said that the Super Bowl ad was not for a specific product, but was meant to highlight the growing problem of obesity and the lack of access to full weight-loss support.
Regulatory Crackdown over Drug Ad Practices
Makary’s comments come just a week after President Donald Trump signed a memorandum directing regulators to crack down harder on drug ads aimed at consumers. That same day, the FDA said it would send around 100 cease-and-desist orders and thousands of warning letters to drugmakers, reminding them to follow advertising standards.
Hims reportedly received a cease-and-desist letter from the FDA concerning its compounded GLP-1s. The letter, as reported by The New York Times (NYT), stated that Hims’ claims “imply that your product is the same as an FDA-approved product when it is not.”
This scrutiny could have major implications for Hims, which reportedly spends around 40% of its revenue on marketing.
Is HIMS Stock a Good Buy?
Turning to Wall Street, HIMS stock has a Hold consensus rating based on two Buys, eight Holds, and two Sells assigned in the last three months. At $49.40, the average Hims & Hers stock price target implies a 9.37% downside risk.
