weight-loss pill — Hims & Hers has stirred excitement in the pharmaceutical industry with the introduction of a weight-loss pill priced at $49 per month. Despite the buzz, the company’s stock ended the trading day down 4%, continuing a trend of volatility that has seen the stock fall significantly over the past few months.
The new product is a compounded version of Novo Nordisk’s Wegovy, which has faced increased competition from Eli Lilly’s offerings in the rapidly growing weight-loss drug market. After initially witnessing a 14 per cent surge at the market open, Hims shares fell sharply, particularly after U.S. FDA head Marty Makary warned about potential actions against companies promoting illegal copycat drugs.
Rajiv Leventhal, a senior analyst at eMarketer, commented on Wall Street’s mixed reaction, noting that while the introductory price of $49 is appealing, it only applies to the first month. Subsequent months will cost $99, which may temper initial enthusiasm.
Hims & Hers has seen its stock fluctuate wildly, shedding more than 60% of its value since mid-October. This roller-coaster ride includes a remarkable 170% surge in January 2025, followed by various sell-offs. On Thursday, around 69 million shares traded, the highest volume since October, as investors reacted to the latest news.
Steve Sosnick, chief strategist at Interactive Brokers, expressed disappointment that the stock could not capitalise on what was perceived as good news. “It’s usually not a good sign when the stock can’t rally on good news,” he remarked.
Hims’ stock has become a target for short-sellers, with nearly one-third of its shares loaned out for short bets, contrasting sharply with Eli Lilly, where less than 1% of shares are borrowed for similar purposes. The volatility surrounding Hims has raised eyebrows, especially following its troubled partnership with Novo Nordisk, which ended abruptly after a few months.
Paul Cerro, founder of Cedar Grove Capital, pointed out that the stock’s performance has been disappointing, suggesting it has “done nothing but go down.” He noted that the uptick in trading volume on Thursday provided an opportunity for fund managers to exit their positions.
Investors are bracing for further volatility, as data from Trade Alert indicates a surge in the stock’s 30-day implied volatility to a three-month high, suggesting potential swings of 20% in either direction by the end of the week.
The ongoing competition between Hims and Novo began in 2023 when Hims received FDA approval to sell versions of Novo’s GLP-1 injectable drugs due to supply shortages of the branded medications. As the stock continues to face challenges, analysts believe the momentum that once buoyed Hims & Hers may have faded.
