What Happened?
Shares of telehealth company Hims & Hers Health (NYSE: HIMS) fell 6.5% in the afternoon session after the U.S. Food and Drug Administration (FDA) sent the company a warning letter regarding “false or misleading” claims about its compounded semaglutide products.
The letter, dated September 9, alleged that the telehealth company's marketing implies its weight-loss products are equivalent to FDA-approved drugs like Ozempic and Wegovy, which they are not. The agency highlighted that compounded drug products are not approved by the FDA and stated that Hims & Hers' claims violate the Federal Food, Drug, and Cosmetic Act. Regulators gave the company 15 working days to outline the steps it will take to address the violations. The FDA warned that failure to do so could result in legal action, including seizure and injunction, creating significant regulatory risk for the company.
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What Is The Market Telling Us
Hims & Hers Health’s shares are extremely volatile and have had 97 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock gained 4.4% on the news that positive momentum continued as the company announced its expansion into the testosterone replacement therapy market.
The telehealth company is launching a new men's health category to tap into a large, underserved market, with an estimated 20 million U.S. men struggling with low testosterone. The new offerings will initially include compounded enclomiphene.
Furthermore, Hims & Hers announced an exclusive partnership with Marius Pharmaceuticals to offer KYZATREX®, an FDA-approved oral testosterone medication, starting in 2026. This strategic move marks the company's entry into the fast-growing hormonal health sector, seen as a way to diversify its portfolio, particularly as sales from its weight-loss drugs have recently slowed. Bolstering investor confidence, analysts at BTIG reiterated a 'Buy' rating on the stock.
Hims & Hers Health is up 102% since the beginning of the year, but at $50.81 per share, it is still trading 26.1% below its 52-week high of $68.74 from February 2025. Investors who bought $1,000 worth of Hims & Hers Health’s shares 5 years ago would now be looking at an investment worth $4,537.
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