Hims & Hers Health has leveraged a regulatory loophole to introduce weight-loss medications similar to Wegovy and Zepbound without undergoing extensive clinical trials. This strategy rapidly increased their sales and secured their position in a highly profitable market. However, after a significant rise in stock value, HIMS shares have recently plummeted by 43% from their peak.
In contrast, other reports highlight that Eli Lilly has introduced its own GLP-1 drugs, such as Mounjaro and Zepbound, gaining substantial market share. Novo Nordisk also has a stronghold with its popular Wegovy and Ozempic treatments. Despite Hims & Hers’ efforts to undercut prices, the established pharmaceutical companies continue to dominate due to their approved formulations and extensive clinical data.
Hims & Hers Faces Stiff Competition
The primary reason for the recent decline in Hims & Hers stock value is Eli Lilly’s decision to offer its FDA-approved weight-loss drugs at a competitive price. Hims & Hers had previously attracted customers by selling its versions at a significant discount, but Eli Lilly’s new pricing strategy directly challenges this advantage.
Eli Lilly plans to sell Zepbound for $399 per month, significantly lower than typical prices.
Hims & Hers managed to create a niche by selling treatments at $199 per month. However, with Eli Lilly now offering lower-cost options in vials instead of expensive injector pens, Hims & Hers’ growth could be severely limited.
Integrity and Safety Concerns
Hims & Hers’ products differ from those of Novo Nordisk and Eli Lilly, as they are often made with alternative forms of semaglutide, such as semaglutide sodium and semaglutide acetate. These substitutes have led to adverse reactions in some users, raising safety concerns.
The FDA has noted that compounded semaglutide products are not the same as the approved drugs.
Additionally, reports have surfaced questioning the credibility of Hims & Hers’ supplier, which has ties to past fraudulent activities and bankruptcy. This could further erode confidence in Hims & Hers’ products and affect their market position.
Eli Lilly’s competitive pricing and direct-to-consumer offerings might mark the end of Hims & Hers’ rapid growth. By providing approved, safer alternatives, Eli Lilly addresses both pricing and safety concerns, making it difficult for Hims & Hers to maintain its market share. For those looking into the weight-loss drug market, it’s vital to consider the safety and approval status of the treatments offered.
