By Amina Niasse
NEW YORK, March 2 (Reuters) – Telehealth company Hims & Hers Health, known for its weight-loss drug business, is promising it can diversify away from its reliance on compounded GLP-1 sales in the U.S., but that may not happen soon enough for investors who are growing impatient.
Hims drew regulatory scrutiny last month with its plan to launch a $49 version of Novo Nordisk’s brand-new Wegovy pill. It quickly reversed course after the U.S. Food and Drug Administration referred the company to the Department of Justice and threatened to restrict the ingredients that pharmacies mix to make their compounded versions.
The company also disclosed recently that it learned in February of a U.S. Securities and Exchange Commission investigation.
At the same time, the company is facing new costs from its U.S. business and expansion into eight countries, including the UK and Australia, making it unclear whether it can meet its growth outlook, three analysts said.
The company’s CEO, Andrew Dudum, has said that despite regulatory pressure, it can sustain its weight-loss business. Dudum said Hims will adjust its business model to meet patient demands, “even in a draconian scenario of compounding GLP-1s not being there.”
Hims predicted growth of over 15% in revenue in 2026, compared with actual growth of 59% in 2025.
Still, following a conference call to discuss quarterly results released on February 23, four analysts revised downward their share price targets, bringing the mean to $20.70 from $29.42 before the call, according to LSEG data. Shares closed at $14.52 on Friday.
“We see a lot of question marks on (Hims), including litigation with Novo Nordisk and potential regulatory changes to the compounding industry,” said Kadyn Kim, an analyst at Morningstar.
Novo sued Hims over its compounded versions of its Wegovy and Ozempic drugs, made with the active ingredient semaglutide. Compounders are allowed to make personalized copies of drugs under U.S. regulation but not mass-produce them.
A spokesperson for Hims & Hers did not immediately respond to a request for comment.
UNCERTAIN REGULATORY CHANGES AHEAD
Kim said the ongoing battle between Novo and Hims and the regulatory action could take over a year to resolve.
Hims said in a filing that it is unclear what actions the regulators may pursue.
Two industry experts said the FDA could add semaglutide to its “do-not-compound” list, which limits the creation of entire drug products due to safety, complexity or efficacy concerns.
The regulator could also update separate lists it maintains on which bulk ingredients are safe to use for personalized compounding, which has never been updated to include semaglutide despite the ingredient’s broad use.
