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Investing.com -- Novo Nordisk shares climbed more than 3% premarket on Tuesday after Hims & Hers Health announced it may no longer sell compounded versions of semaglutide, the active ingredient in Novo’s weight-loss drugs.
It comes after the FDA said the drug’s shortage is over, effectively closing the pathway for compounding pharmacies to offer alternative formulations.
According to Bank of America analysts, the decision to halt commercial semaglutide doses is a positive development for Novo, which has faced concerns over the impact of compounded versions on its GLP-1 drug franchise.
"Potential for less compounding impact [is] important for Novo," BofA noted, adding that the focus remains on prescription momentum in the U.S. market.
While Hims & Hers will stop offering commercial semaglutide doses after Q1 2025, the company stated that some personalized dosages may still be available for patients with a "clinical necessity."
Instead, its weight-loss program will now focus on oral-based solutions and liraglutide (Saxenda), which is also a Novo product.
"We see our steady-state weight loss offering being primarily composed of our evolving oral-based solutions as well as liraglutide later this year," HIMS said on its earnings call.
BofA reiterated its Buy rating on Novo Nordisk (NYSE:NVO), citing strong forward growth projections despite recent investor concerns.
Analysts see CagriSema and oral semaglutide as underappreciated catalysts and believe the company’s guidance remains conservative.
"We simply believe in Novo’s guide as historically having been conservative, with return of EPS momentum possible," the analysts concluded.