Hims & Hers Stock Draws Investor Attention After Tumbling 7% – Here’s What Happened

Shares of Hims & Hers Health (HIMS) slumped 7% on Tuesday after the U.S. Food and Drug Administration (FDA) sent a letter to the company CEO regarding the sale of compounded drug products.

In the letter dated September 9, the agency alleged that the company’s claims concerning compounded Semaglutide products, used for weight loss, are “false or misleading.” The FDA also noted that this is a violation of certain sections of the Federal Food, Drug, and Cosmetic Act.

The FDA pointed out that compounded drug products are not approved by it. “Your claims imply that your products are the same as an FDA-approved product when they are not,” the letter said, while urging the company to take immediate action to address violations. A failure to adequately address any violation may result in legal action without further notice, it added.

The FDA further alleged that these compounded products are misbranded and noted that the introduction of misbranded products into interstate commerce is prohibited. While the letter referred to two claims made on compounded Semaglutide products made on Hims’ website, it does not represent an exhaustive list of misbranding violations, the agency said.

The FDA has given CEO Andrew Dudum 15 working days from the receipt of the letter to provide a written response describing the steps taken to address violations or to provide reasoning and supporting information if he believes the company is not in violation.

On Stocktwits, retail sentiment around HIMS stock jumped from ‘bullish’ to 'extremely bullish' territory over the past 24 hours, while message volume stayed at ‘high’ levels.

In June, Novo Nordisk (NVO) said that it is halting collaboration with Hims & Hers for the sale of its blockbuster weight loss drug Wegovy, the key ingredient of which is Semaglutide. Novo said that Hims & Hers failed to adhere to the law, which prohibits mass sales of compounded drugs. It further alleged that the telehealth operator is promoting and selling illegitimate, knockoff versions of Wegovy and has hence decided to halt the collaboration entered into in late April.

Dudum, however, subsequently alleged that Novo’s management is “misleading the public.” The CEO stated in a post on X that the pharmaceutical company’s commercial team has been pressuring the company to control clinical standards and steer patients toward Wegovy, regardless of whether it is clinically the best option for patients.

HIMS stock has more than doubled its value this year and tripled over the past 12 months. 

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