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Investing.com - Hims & Hers (NYSE:HIMS) said on Monday that it may stop selling legal copies of a popular weight-loss drug made by Denmark’s Novo Nordisk (NYSE:NVO), sending shares in the U.S. telehealth firm lower by more than 22% in premarket U.S. trading.
The firm had been lawfully selling less-expensive compounded versions of Novo’s popular -- and patented -- Wegovy obesity medication.
However, last week, the U.S. Food and Drug Administration said the shortage had ended, and gave compounders like Hims & Hers between 60 to 90 days to cease making copies of the drug.
In a regulatory filing, Hims & Hers flagged that it cannot "guarantee that we will be able to continue offering these products in the same manner, to the same extent or at all." But the company said it still believes there may remain ways to keep "offering access to certain compounded GLP-1s," referring to the class of weight-loss medications that analysts have estimated could be worth $200 billion by 2031.
The announcement came as Hims & Hers reported weaker-than-expected fourth-quarter earnings. For the three months ended December 31, the company posted diluted income per share of $0.11 on revenue of $481.1 million, compared with analyst estimates of $0.17 and of $469.3 million, respectively.
For the current quarter, Hims & Hers expects revenue to be in a range of $520 million to $540 million and adjusted earnings before interest, taxes, depreciation, and amortization of $55M to $65M.
Full-year 2025 revenue is seen at $2.3 billion to $2.4 billion and core earnings are tipped to be $270 million to $320 million.
"[W]e expect shares are likely to see a negative reaction given [Hims & Hers’ fourth-quarter] results below broader expectations and the company sounding relatively more measured in tone with respect to GLP-1 revenue contribution," analysts at Truist said in a note to clients.
(Yasin Ebrahim contributed reporting.)