TD Cowen discusses impact of FDA weight loss suit on Hims & Hers

TD Cowen says that in response to the legal action taken against the FDA by the Outsourcing Facilities Association on the removal of tirzepatide off the shortage list, FDA proposed a joint status report to be scheduled on November 21. While it is not clear what the report will entail, if the case is resolved and tirzepatide is deemed to be off shortage, semaglutide will likely take a similar path, the analyst tells investors in a research note. TD adds that while Hims & Hers does not compound tirzepatide and only semaglutide, if the FDA reaffirms its initial decision, this could mean semaglutide could take a similar path to get off shortage. This could indicate the company may not be able to compound semaglutide, although the exact time frame is still unknown as to when semaglutide could be off shortage, the firm contends. If semaglutide is off the shortage list, TD’s base case assumes high teens sales growth in fiscal 2025 and 2026 for Hims, with 400,000 net subscriber additions to the platform each year, which is below 500,000 in fiscal 2023. If and when the shortage is resolved, Hims & Hers will continue to focus on weight loss as a specialty and offer oral medication, personalized dosages in compounded GLP-1s, and Liraglutide, says TD. IT keeps a Buy rating on the shares with a $28 price target