Key Takeaways
- Hims & Hers shares gained Monday after the Food and Drug Administration said compounding pharmacies could continue to produce copycat weight-loss drugs while it reconsiders whether there is a shortage.
- The change would be a boon for Hims & Hers, which makes copycat weight-loss drugs, and has benefited from the limited availability of some obesity medicines.
- With Monday’s gains, Hims & Hers shares have more than doubled in value since the start of the year.
Hims & Hers Health (HIMS) shares surged Monday after the Food and Drug Administration (FDA) said compounding pharmacies could continue to produce copycat weight-loss drugs while it reconsiders whether there is a shortage of their active ingredient.
The FDA is facing a lawsuit after it ruled earlier this month that Eli Lilly’s (LLY) popular weight-loss treatments Mounjaro and Zepbound were no longer on its shortages list. The agency allows companies like Hims & Hers to produce compounded copycat drugs when the originals are hard to obtain, allowing them to benefit from the demand for obesity treatments.
In a court filing Friday, the FDA said it would not take action against companies that are in violation of its decision last week while it reconsiders the matter. The suit was filed by the Outsourcing Facilities Association, a trade association representing compounding pharmacies.
Shares of Hims & Hers gained nearly 10% to close at $20.50 Monday. The stock has more than doubled in value since the start of the year.
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