Hims & Hers soars after announcing $199 weight loss shots

Shares of Hims & Hers (HIMS), a telehealth company that sells prescription and over-the-counter drugs online, as well as personal care products, soared on Monday after the company announced the addition of GLP-1 injections to its weight loss portfolio. Citi said the launch will will significantly increase the interest in Hims & Hers’ weight loss offering, but cautioned investors that “this is a risky move.”

Hims & Hers on Monday morning announced the addition of GLP-1 injections to its weight loss portfolio. The company now offers access to GLP-1 injections in addition to weight management oral medication kits, Hims & Hers said in a statement. Hims & Hers will be providing a compounded form of the injections that use the same active ingredients as the popular drugs Ozempic and Wegovy, which are facing shortages that are limiting access for some patients. “Through a partnership with a leading U.S. manufacturer of generic and 503B compounded injectable medications, Hims & Hers can help millions of Americans who have obesity and are looking for help safely managing their weight.”

“The core of our business is to offer a truly personalized experience that customers can trust and rely on,” said Andrew Dudum, CEO and co-founder of Hims & Hers. “We’ve leveraged our size and scale to secure access to one of the highest-quality supplies of compounded GLP-1 injections available today. We’re passing that access and value along to our customers, who deserve the highest standard of clinical safety and efficacy to meet their goals, and we’re doing it in a safe, affordable way that others can’t deliver.”

The price for compounded GLP-1 injections will start at $199 a month. Its oral medication offering starts at $79 a month. Both are not available in all states.

WHAT’S NOTABLE: Novo Nordisk (NVO), the maker of Ozempic, said earlier in the year that shortages of the drug will persist through the year due to rising demand and manufacturing capacity constraints. Wegovy, which is also made by Novo Nordisk, costs about $1,350 for a month of injections without insurance, and Eli Lilly’s (LLY) Zepbound, which is also facing shortages, is similarly priced.

‘RISKY MOVE’: While Citi expects the launch of Hims & Hers’ GLP-1 offering to significantly increase the interest in the company’s weight loss offering and expects the stock to trade up on the launch given the GLP-1 halo effect, the firm cautions investors that “this is a risky move.” The firm says that the program will likely be met with some controversy as it does introduce more regulatory and legal risk into the model as the FDA increases scrutiny of compounded GLP-1s and Novo Nordisk and Eli Lilly aggressively take legal action against what they view as counterfeit drugs. Citi adds that management assured it the company is comfortable from a regulatory perspective. The firm keeps a Buy rating on the shares with a $16 price target.

PRICE ACTION: Shares of Hims & Hers are up nearly 31% to $19.03 in mid-morning trading.