Hims & Hers bets FDA shortage rule on $199 GLP-1s; channel closes, stock swings

Hims & Hers, the NYSE-listed telehealth company led by Andrew Dudum, bet its weight-loss business on a legal loophole: FDA rules allow compounding pharmacies to make 'essentially a copy' of an approved drug only while that drug sits on the agency's shortage list. Semaglutide, the active ingredient in Novo Nordisk's Ozempic and Wegovy, had been in shortage since 2022, so on May 20 2024 Hims began selling compounded semaglutide injections at $199/month — roughly a fifth of the branded price — through its existing direct-to-consumer funnel. Shares closed up 27% that day.

The product became its growth engine: GLP-1 offerings generated $225M+ in 2024, helping revenue reach $1.5B. But the exemption was time-limited by design. The FDA ended Lilly's tirzepatide shortage on Oct 2 2024, then the semaglutide shortage on Feb 21 2025; Hims shares fell more than 25% that day. On its Feb 24 2025 earnings call the company said it would likely stop compounded semaglutide after Q1, and blamed GLP-1 scaling for a margin miss that knocked another 22% off the stock. Novo Nordisk then ended its commercial collaboration with Hims in June 2025, sending shares down 31%.

The company survived the regulatory reversal because the shortage had bought it a subscriber base and a brand: it finished 2025 with 2.5 million subscribers and $2.35 billion of revenue, and it pivoted to oral medications, branded injectables like liraglutide, and partnerships. But on the Q4 2025 earnings call (Feb 23 2026), CEO Andrew Dudum conceded the company had to plan for a 'draconian scenario' in which compounded GLP-1s disappear, and 2026 guidance of $2.7-2.9B excludes semaglutide entirely. The bet made the stock, and the regulatory clock that enabled it also ended it.