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Key Takeaways
- Hims & Hers Health said Thursday it would start selling a compounded weight-loss pill, at a lower price than rivals.
- Shares of Eli Lilly and Novo Nordisk tumbled following the announcement, while Hims & Hers shares initially surged before reversing course.
A new pill from Hims & Hers Health is rattling shares of leading weight-loss drugmakers.
Shares of Eli Lilly (LLY) and Novo Nordisk (NVO) each slipped about 8% Thursday after Hims & Hers said it would start selling a compounded weight-loss pill, at a lower price than rivals. Hims & Hers (HIMS) shares initially surged close to 14%, before reversing course to finish nearly 4% lower.
Hims & Hers said the new pill starts at $49 per month for five months, and comes with the same active ingredient as Novo Nordisk’s Wegovy, which received FDA approval in December and costs $149 for self-pay patients, according to the company’s website.
The new Hims & Hers pill could challenge Novo Nordisk’s Wegovy, and the Danish drugmaker said it plans to take legal action in a statement.
Why This Matters to Investors
Hims & Hers has run into conflicts with Eli Lilly and Novo Nordisk with its compounded weight-loss offerings previously. Thursday’s stock moves could point to concerns about the new product’s impact, as well as responses to its launch.
The announcement comes a day after Eli Lilly and Novo Nordisk shares moved in opposite directions following their latest earnings reports, as Novo Nordisk warned of sales could decline this year, while Eli Lilly said its sales are expected to keep growing.
Eli Lilly said Wednesday that it expects to start selling its own oral weight-loss medication in the second quarter of this year, assuming it gets approved by the FDA, which would add another competitor to Novo Nordisk’s Wegovy pill and Hims & Hers’ new compounded pill.
With Thursday’s moves, shares of Hims & Hers have are down more than 40% over the past 12 months. Novo Nordisk shares have lost roughly half their value over the same period, while Eli Lilly shares have added about 17%.
