Feb 24 (Reuters) – Hims & Hers (HIMS.N) announced on Monday that it may no longer be able to offer compounded versions of the weight-loss drug Wegovy, made by Novo Nordisk (NOVOb.CO), after the U.S. FDA declared the drug’s shortage over. The news caused the company’s shares to drop by 19.4%, closing at $41.41 after market hours.
Compounding pharmacies had been legally making copies of Novo’s Wegovy during the drug’s shortage. However, on Friday, the FDA removed Wegovy from its shortage list and gave compounders 60 to 90 days to stop producing copies of the still-patented drug.
Hims & Hers, a telehealth provider, had been selling these compounded versions at a lower price than Novo’s Wegovy and had a steady supply. In a regulatory filing, the company said it believes there are ways to continue offering compounded GLP-1 drugs after the shortage ends, but it cannot guarantee it will be able to do so in the same way, or at all.
The company had been preparing to sell compounded semaglutide with personalized doses after the shortage ended. However, in a research note published on Friday, Leerink Partners analyst Michael Cherny emphasized the need for Hims & Hers to clarify the legal pathway for selling personalized doses of semaglutide in the future.
On Monday, drug compounders sued the FDA, claiming the agency’s decision to declare that the shortage of semaglutide had ended was arbitrary and unfair.
For Americans unable to afford Wegovy or those who struggled to find it, cheaper alternatives from compounding pharmacies and telehealth providers like Hims & Hers and WeightWatchers (WW.O) have become popular. Wegovy has been shown to help patients lose up to 15% of their body weight on average.
Although the compounded versions are not FDA-approved, both the FDA and state authorities oversee these pharmacies.
In addition, Hims & Hers reported a fourth-quarter revenue of $481.1 million, exceeding the average analyst estimate of $470.3 million, according to data from LSEG.
The company also warned that the price of compounded versions of the drug could rise significantly, potentially leading to cancellations of existing subscriptions and lower demand from new customers.
