Bank of America just raised its EUR/USD forecast
On Friday, BofA Securities maintained an Underperform rating on shares of Hims & Hers Health, Inc. (NYSE:HIMS) with a steady price target of $18.00.
The firm expressed ongoing concerns about the future of the company's compounded GLP-1 products due to aggressive defense tactics by pharmaceutical manufacturers. These concerns come even as HIMS demonstrates solid financial health, with InvestingPro analysis showing a healthy current ratio of 2.14 and minimal debt levels.
The analyst from BofA Securities highlighted recent actions by Novo Nordisk (NYSE:NVO), a major pharmaceutical company, which could impact Hims & Hers' strategy. Last week, Novo Nordisk submitted a Citizen Petition to the FDA, seeking to restrict compounding pharmacies from producing generic versions of its diabetes drug Victoza, known generically as liraglutide.
This move by Novo Nordisk came after the Outsourcing Facilities Association nominated liraglutide for inclusion on the 503B Bulks List, which is a register of drug substances approved for compounding. The analyst emphasized the importance of following any forthcoming decisions from the FDA, as these could potentially limit Hims & Hers' ability to launch their compounded versions of liraglutide.
Hims & Hers, which is planning to introduce liraglutide in 2025, may face additional risks to their GLP-1 portfolio expansion strategy if further compounding restrictions are imposed. The company's anticipated product launches hinge on the ability to compound these substances, which are now under scrutiny.
The BofA Securities report suggests that the outcome of the FDA's response to the Citizen Petition and the status of liraglutide on the 503B Bulks List will be critical factors in determining the future prospects of Hims & Hers' compounded GLP-1 product offerings.
In other recent news, Hims & Hers Health has been the focus of several significant developments. The company has received a Buy rating from BTIG and was named a top pick for 2025 by Needham & Company due to its robust revenue growth and strong demand for its health services. Morgan Stanley (NYSE:MS) also initiated coverage on Hims & Hers with an Overweight rating, acknowledging its potential in the digital health and direct-to-consumer sectors.
The company reported a 77% year-over-year increase in Q3 sales, surpassing $400 million, and an adjusted EBITDA over $50 million. Revenue projections for Q4 2024 range between $465 million and $470 million, indicating a significant year-over-year increase.
However, the resolution of the tirzepatide injection shortage by the FDA may alter market dynamics for obesity drugs, impacting companies like Hims & Hers that have been offering compounded versions of such medications. To counter this, Hims & Hers recently announced a partnership with Eli Lilly (NYSE:LLY) to streamline access to FDA-approved obesity medication Zepbound.
In a similar move, digital health company Ro also announced a collaboration with Eli Lilly, aiming to facilitate access to Zepbound. These developments highlight the ongoing efforts by Hims & Hers to continue providing comprehensive health services to its customers.
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