Hims & Hers Stock Drops 9.2% Amid Legal Ruling Impact

Hims & Hers Health shares fell 9.2% after a Texas court ruling poses risks to the GLP-1 drug market. Investors should monitor earnings effects.

Date: 06-03-2025

AI Rating: 3

Impact of Texas Ruling on Hims & Hers Health

Hims & Hers Health (NYSE: HIMS) experienced a notable decline in its stock price, falling by 9.2%, largely due to a recent legal ruling in Texas concerning the regulation of GLP-1 weight loss drugs. This court ruling potentially jeopardizes the company’s ability to continue selling its own GLP-1 drugs.

This negative news stems from a lawsuit filed by the Outsourcing Facilities Association (OFA) against the FDA. The lawsuit aimed to restrict the FDA from declaring the end of drug shortages related to tirzepatide, which is a critical ingredient for competitive drug offerings in the weight loss sector. The ruling indicates that the FDA may soon declare an end to the shortage of Zepbound, which would significantly disrupt Hims & Hers' operational dynamics.

As the FDA previously announced the end to the semaglutide shortage, there is mounting concern that a similar declaration regarding tirzepatide could severely impact Hims & Hers' GLP-1 sales. The fact that the court upheld the FDA’s ability to declare an end to drug shortages poses a real risk to Hims & Hers’ business and future revenue. Investors are cautious, given that such developments can lead to a critical decline in profit margins and overall revenue growth.

Moreover, the ruling suggests that the company may face a decrease in market share as competition from established pharmaceuticals like Eli Lilly and Novo Nordisk becomes more pronounced, potentially leading to reduced net income and lower EPS in upcoming reports.

Stocks: HIMS