Hims stock dropped sharply Friday after the U.S. Food and Drug Administration said the shortage of widely-used weight-loss and diabetes drugs has been resolved.
The FDA website indicated that the shortage of Novo Nordisk's Ozempic and Wegovy has ended. The announcement is bad news for Hims & Hers, a compounding pharmacy that makes a knockoff version of Wegovy.
In December, the FDA said Eli Lilly drugs Mounjaro and Zepbound were no longer in shortage.
Hims stock crashed 25.8% to close at 49.28 after hitting a record 72.98 on Wednesday. Shares of Novo Nordisk rallied 5.2% to close at 88.08, just below a long-sliding 50-day line. Eli Lilly stock rose a fraction to close at 873.68.
Hims stock, which has rallied more than 120% this year, is on track to record its first weekly loss in six weeks, according to IBD MarketSurge. The shares have had a strong Relative Strength rating of 99.
The news underlines the role played by compounders, companies allowed to create knockoffs of drugs to offset shortages, in the fast-growing weight-loss drugs industry.
Hims & Hers also recently took some heat for a Super Bowl ad that does not include any warnings about the side effects of Wegovy.
Him & Hers will report Q4 results on Monday.
