Hims & Hers Stock Price (HIMS) End’s Impressive 2024 With a Forgetful December

Hims & Hers Health stock (NYSE: HIMS) is down a further 2% in the pre-market session, adding to the bearish sentiment that has taken hold over the past month of trading. With HIMS stock price having shed 13.91% over the past month, and more than 22% from the recent highs just weeks ago, holders are looking for something that can shift the narrative.

The bulls had been clearly in charge through 2024 leading into December, with gains of 175% putting the stock in the realm of elite performers YTD.

In recent weeks, the U.S. Food and Drug Administration (FDA) announced the resolution of the tirzepatide injection shortage. This measure has sparked concern among investors regarding the future of Hims & Hers’ compounded drug offerings.

The FDA's decision came after a lawsuit initiated by a compounding trade association, prompting a reevaluation of tirzepatide's shortage status. The resolution of this shortage could potentially impact companies like Hims & Hers Health, which have been providing compounded versions of obesity medications, including Novo Nordisk's Wegovy. The market reacted to the news with heightened caution due to uncertainties surrounding Hims & Hers' future role in the obesity drug market.

In light of the shortage resolution, the FDA has established grace periods for compliance. State-licensed pharmacies have until February 18, 2025, and outsourcing facilities until March 19, 2025, to continue compounding tirzepatide. Moreover, the FDA has communicated its readiness to take action against any entities found in violation of statutory or regulatory requirements that result in substandard quality or unsafe products.

Despite the resolution of the tirzepatide shortage, the FDA continues to list semaglutide and other GLP-1 products as still being in shortage. This ongoing situation underscores the complexities faced by the obesity drug market and the compounded drug sector at large.

The stock market's response underscores investor concerns about the potential impact of the FDA’s resolution on Hims & Hers Health's business model. With the FDA's stringent regulations and oversight, companies involved in compounding must navigate a challenging landscape that balances market demands with compliance requirements.

While the resolution of the tirzepatide shortage by the FDA marks a significant shift in the market, it also brings to light the challenges that companies like Hims & Hers Health face in adapting to regulatory changes and maintaining their positions in the healthcare industry. The coming months will be critical in determining how these developments shape the future landscape of obesity drug offerings.