Hims & Hers is getting a second chance at life—and it's all thanks to an unexpected ally.
Novo Nordisk, which manufactures the ultra-lucrative GLP-1 drug Wegovy, made a deal with telehealth providers like Hims, Ro, and LifeMD to sell the weight-loss shot directly to customers for roughly half the drug’s original list price, the companies announced today.
Hims & Hers skyrocketed 22.90% on the news, while Novo Nordisk ended the day 4.06% higher. Another telehealth firm, LifeMD, soared 41.31%. Ro is privately held.
Zoom out: Hims has been on a roller coaster ride over the past year, as investors live and die by every development in the firm’s quest to seize a share of the booming GLP-1 market.
Last spring, the telehealth firm announced it was selling “compounded semaglutide” —a technically legal, but not FDA-approved, knockoff version of big pharma’s GLP-1 drugs Ozempic and Wegovy. But after the FDA pulled the blue-chip versions of the drug off its shortage list in February, Hims and other telehealth firms selling the cheaper, off-brand version of GLP-1s were left out in the cold. Hims dropped 22% in one day after the FDA announced the fun was over for compounded semaglutide.
Now, Hims has been saved by the very company that has been trying to thwart its business for the last year. It turns out that Novo Nordisk had bigger fish to fry than off-brand telehealth companies: Eli Lilly, the other big kahuna of the weight-loss market. Last Wednesday, Eli Lilly sued a slew of telehealth firms, including Hims, for selling compounded semaglutide.
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The news comes just as investors were losing hope in Hims. This very morning, before the deal was announced, Morgan Stanley cut its price target on Hims down to $40 from $60, and the stock was down 45% from its Q4 earnings announcement at the end of February.
What does this mean for telemedicine?
If you haven’t been following the Ozempic craze, these drugs have supersized Novo Nordisk’s market cap for a reason: massive demand.
But the challenge for big pharma has been getting the drug to patients who can’t afford its over-$1,000 price tag without insurance. Eli Lilly, Novo’s biggest competitor and the maker of Zepbound, opened its own online, direct-to-consumer website called LillyDirect to sell cheaper versions, a la Hims & Hers.
With the new deal, Hims will sell Wegovy for $599 per month, while Ro and LifeMD will charge $499 per month—still far more expensive than the off-brand version Hims has been selling for $165 per month.
Don’t forget: Just as these telehealth firms are working it out with Novo on the remix, a whole new pill version of GLP-1s is on the horizon—and will likely shake up the weight-loss market once again.—LB