HIms and Hers shares drop after FDA says Lilly's weight-loss drug not in shortage

Investing.com -- Shares in telehealth group Hims & Hers Health (NYSE:HIMS ) dropped in premarket US trading on Thursday after federal drug regulators said Eli Lilly (NYSE:LLY )'s blockbuster weight-loss and diabetes medications are no longer considered to be in shortage.

Major drug companies, including Eli Lilly and rival Novo Nordisk (NYSE:NVO ), have struggled to keep up with the soaring demand for these medications, which have been shown to help patients lose up to 20% of their weight on average.

Because of this shortage, US regulations have allowed businesses to make compound versions, or close recreations of brand-name medicines.

Hims & Hers is one such compounder, offering an injection of semaglutide -- the key ingredient in Wegovy -- for $199 per month to patients on a 12-month plan, according to its website. The company said last month that it would begin selling compound versions of Novo Nordisk's popular Wegovy drug to patients in certain professions for $99 a month.

However, the Food and Drug Administration has now said that tirzepatide -- the medication Eli Lilly markets as Zepbound for weight loss and Mounjaro for diabetes -- is no longer in short supply in the US, ending a shortage classification it first put in place in 2022.

"FDA confirmed with the drug’s manufacturer that their stated product availability and manufacturing capacity can meet the present and projected national demand," the FDA said in a statement on Wednesday. It added that patients and prescribers may still see "intermittent localized supply disruptions as products move through the supply chain" from the manufacturer to local pharmacies.

Analysts at BMO Capital Markets said the news was a "clear positive" for Eli Lilly's manufacturing capabilities, and "puts pressure on compounded GLP-1s," referring to the class of drugs designed for weight management.

"With Lilly able to adequately supply current and future demand for tirzepatide, we believe it could continue to grow market share in incretin products as manufacturing continues to expand,” the BMO analysts said.

Source: Investing.com