Zinger Key Points
- Hims & Hers Health Q3 2024 revenue projected to surpass estimates by $5M-$10M.
- Truist consumer survey shows 10% use compounded GLP-1 medications, while 14% prefer branded options.
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Thursday, The FDA determined the shortage of Eli Lilly And Co’s LLY tirzepatide injection, a glucagon-like peptide 1 (GLP-1) medication, has been resolved.
Tirzepatide injection, branded as Mounjaro and Zepbound, has been in shortage since 2022 due to increased demand.
The U.S. health regulator reminded compounders of the legal restrictions on making copies of FDA-approved drugs.
The FDA noted that Novo Nordisk A/S‘ NVO semaglutide (Wegovy, Ozempic) is still in shortage.
Despite semaglutide being the active ingredient in Hims & Hers Health Inc’s HIMS compounded GLP-1 product, a Truist analyst notes that the recent FDA commentary has reignited investor concerns about the long-term viability of compounded GLP-1 treatments once the supply shortage ends.
Truist’s consumer survey reveals that approximately 10% of consumers currently use compounded GLP-1 medications, while 14% are on branded versions.
Many people opting for compounded GLP-1s cite lower costs as the main reason, while others note that their primary care physicians are hesitant to prescribe the branded versions.
Hims & Hers Health’s assertion that demand for its weight loss service could remain strong, even after supply shortages ease, as long as the company operates within compounding regulations and respects branded drug patents.
Based on third-quarter card data analysis, the analyst notes that Hims & Hers Health’s Q3 2024 revenue is expected to exceed the company’s guidance range of $375 million to $380 million by approximately $5 million to $10 million.
The analyst also highlights that Hims & Hers Health’s average transaction price was up 14% sequentially at $126.9 vs. ~$111 in the second quarter of 2024. Net orders for 3Q24 increased 3% sequentially from 2Q24.
Truist maintains a Hold rating for Hims & Hers Health with a price target of $23.
Price Action: HIMS stock is up 0.18% at $17.16 at the last check Friday.
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