The U.S. FDA has officially declared that Novo Nordisk’s (NVO) popular diabetes and weight loss therapies, Ozempic and Wegovy, are no longer in shortage. As a result, shares of Hims & Hers Health (HIMS), which had been manufacturing compounded versions of these medications to fill the supply gap, sank in today’s trading.
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This ends a nearly three-year shortage that created opportunities for compounding pharmacies. Indeed, Hims & Hers had introduced customized versions of semaglutide, the active ingredient in Ozempic and Wegovy, at a significantly lower price point than the branded versions. However, with the shortage now resolved, Hims & Hers will no longer be able to produce these compounded versions.
Nevertheless, the FDA has offered a grace period until April 22 and May 22 to compounding pharmacies and outsourcing facilities, respectively. During this time, the agency won’t take any action against these companies for producing compounded versions of semaglutide. This is being done to help avoid disrupting patient treatment and to ensure a smooth transition as the pharmaceutical supply chain adjusts to the decision.
Is HIMS Stock a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on HIMS stock based on three Buys, five Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 450% rally in its share price over the past year, the average HIMS price target of $39.89 per share implies 23% downside potential.
