NEW YORK: Hims & Hers Health Inc has forecast 2026 revenue that will meet Wall Street’s expectations, provided that it can continue selling copycat weight loss drugs that are mired in legal and regulatory risks.
Sales for the year will be between US$2.7bil and US$2.9bil, the telehealth company said, matching the US$2.75bil average estimate from analysts.
The forecast depends on its ongoing ability to sell compounded versions of Novo Nordisk A/S’ Ozempic and Wegovy, a class of drugs known as GLP-1s, the company said in a statement.
Hims’ shares have lost more than half their value since January, as competition in the obesity market intensified and it botched the launch of a copycat version of Novo’s new weight loss pill.
The US Food and Drug Administration vowed to take action against the knock-off compounds and Hims was hit with a lawsuit from the Danish drugmaker just days after the launch.
In a post on X, Hims chief executive officer Andrew Dudum attempted to quell investor’s concerns about the company’s reliance on weight loss drugs, while emphasising other areas of the business.
“Today, some may think of us as a GLP-1 company. The reality is that only a small minority of our subscribers are using a compounded GLP-1 treatment,” Dudum wrote. “While the cultural conversation changes over time, our value to customers remains the same.”
Analysts said they expect the focus to remain on obesity for now.
“The much bigger part of the Hims story is the weight loss trajectory,” Leerink Partners analyst Michael Cherny said in a note after earnings were released. While the company is seeking to expand its global footprint, the more important component is how Hims progresses with the weight-loss business, he said.
Hims’ shares fell 1.7% in post-market trading in New York on Monday.
For a time, weight-loss drugs were a major boon for Hims. When Novo and rival Eli Lilly & Co were struggling to meet the fervent demand for their shots, companies like Hims filled the gap by offering compounded versions that were sold for less.
When shortages ended last year, those telehealth companies were supposed to stop selling copycats. Most didn’t. Hims doesn’t typically disclose weight-loss drug sales, but according to estimates from Leerink Partners, they accounted for about US$800mil of the company’s revenue last year.
Hims and other companies have bent the rules by tweaking dosages or adding ingredients so their products are considered different enough from the brand-name drugs that they don’t come under scrutiny.
But it appeared that Hims’ decision to undercut Novo’s new weight-loss pill – just weeks after it hit the US market – was a step too far.
In early February, Hims announced a knockoff formulation of the Wegovy pill starting at US$49 for the first month, then US$99 monthly for those who sign up for a five-month subscription.
Novo’s brand-name pill, which launched in January, starts at US$149 a month for the lowest dose.
Novo immediately slammed the move as “illegal” and said it posed a significant risk to patients. The Danish company had been pinning its comeback hopes on the Wegovy pill after losing market share to Lilly. —Bloomberg
