Hims stock recovered Wednesday after Eli Lilly denied any affiliation with the telehealth platform, meaning Hims & Hers Health is likely selling the full-cost version of Lilly's obesity drug.
Analysts don't expect much uptake for Hims' branded tirzepatide. Hims & Hers made a big name for itself selling copycat versions of tirzepatide and Novo Nordisk's semaglutide while they were in shortage. But the Food and Drug Administration recently ended those shortages, meaning companies have had to stop selling the commercially available dosages of the obesity drugs.
Lilly sells tirzepatide as the type 2 diabetes treatment Mounjaro and in obesity treatment as Zepbound. On the company's customer-facing website, LillyDirect, patients can pay $349 per month in cash for the tirzepatide-based medicines. Insured patients could pay as little as $25 a month. For cash-pay patients, tirzepatide runs north of $1,000 a month, based on its wholesale acquisition costs.
Hims stock initially slipped, but managed to close with a fractional gain at 31.22. On Tuesday, following news Hims & Hers Health would offer branded tirzepatide and generic liraglutide — Novo's diabetes drug Victoza — on its website, shares closed with a 5.3% gain after initially rallying by double digits.
Hims Stock Faces High 'Prohibitive' Cost
Citi analyst Daniel Grosslight sees the high cash price of tirzepatide as being "prohibitive," according to The Fly. Even if the company notches strong sales for branded tirzepatide, the margins will be small.
He kept his sell rating and 27 price target on Hims stock.
Hims & Hers has predicted $725 million in sales from its weight-loss drugs this year. That would account for nearly 12% of the Street's current total revenue forecast of $2.31 billion, according to FactSet.
Like Grosslight, Morgan Stanley analyst Craig Hettenbach said Hims will likely realize much lower margins for branded tirzepatide than its compounded weight-loss drugs. Notably, compounders can still sell personalized doses of the weight-loss drugs.
Hettenbach rates Hims stock equal weight with a 60 price target.
Hims stock surged to a record high in mid-February. Shares have fallen 54% since then, as of Tuesday's close.
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