Hims & Hers (HIMS) stock plunged 27% on Tuesday after the telehealth high flyer indicted it may soon stop offering some compounded versions of weight-loss drugs.
The company's fourth quarter results came in better than expected. But investors were spooked over the potential loss in revenue from the blockbuster GLP-1 segment, which targets diabetes and weight loss.
Hims & Hers CFO Yemi Okupe downplayed those concerns, saying the weight-loss business makes up only part of the company's revenue.
"While we're excited to have 200,000 subscribers join our weight-loss specialty over the course of the last year, it's also important to not lose sight of the other 2 million subscribers that have signed up for non-weight-related businesses," Okupe told chof360 Finance on Monday.
Okupe went on to highlight the company reported $1.5 billion in revenue for 2024, with $1.2 billion from sources other than GLP-1s.
"We do fully intend to abide by all regulatory requirements and, when necessary to do so, will remove all commercially available dosages of semaglutide from the platform," he said, while still expressing confidence in the company's weight-loss offering.
The company forecast full-year revenue of $2.3 billion to $2.4 billion, higher than the consensus Wall Street estimate of $2.09 billion. Still, the reaction from Wall Street has been cautious.
37.08
-
(-27.72%)
As of 12:15:13 PM EST. Market Open.
Since 2022, the industry has grappled with a shortage of semaglutide injection products due to heightened demand.
Last year, Hims & Hers stock surged more than 200% as the company prescribed compounded semaglutide, the ingredient found in blockbuster drugs like Novo Nordisk's (NVO) Ozempic and Wegovy.
However, the stock tumbled 26% from its all-time high last Friday after the US Food and Drug Administration (FDA) said the shortage of GLP-1 drugs has been resolved and that it would start going after compounders for making a version of FDA-approved drugs no longer in short supply.
Despite the recent tumble, shares are still up 48% year to date.
On Tuesday, Novo stock rose 2%. Pharmaceutical giant Eli Lilly's (LLY) shares also gained after the company announced it was cutting the cost for its GLP-1 weight-loss prescription Zepbound.
Ines Ferre is a senior business reporter for chof360 Finance. Follow her on X at @ines_ferre.
Click here for in-depth analysis of the latest stock market news and events moving stock prices
Read the latest financial and business news from chof360 Finance
