Two stocks in the weight-loss healthcare sector experienced significant declines on Monday, while a competitor saw its shares rise. Novo Nordisk, known for Wegovy, saw its stock decrease by 2.90%, and Viking Therapeutics, which is advanced in developing a GLP-1-based obesity treatment, saw a 7.34% drop. Conversely, Hims & Hers Healthcare experienced a 5.22% increase in its share price.
Hims & Hers gained investor confidence following a highly visible advertisement during the Super Bowl. The company, primarily a telehealth service that retails weight-loss drugs, utilized the opportunity to promote its offerings through a strategic and modern one-minute advertisement. Notably, Hims & Hers does not develop these drugs but instead sells compounded semaglutide, leveraging a legal loophole.
Unlike Hims & Hers, Novo Nordisk is both the developer and marketer of Wegovy, a leading product in the market, while Viking Therapeutics’ VK2735 has shown promising testing results and is in the later stages of development. Both products are strong contenders in the obesity drug market.
The advertisement strategy by Hims & Hers aimed to position the company prominently in the minds of consumers looking for innovative weight-loss solutions, which appeared to have shaken investor confidence in its competitors.
However, there is skepticism regarding the long-term impact of Hims & Hers’ marketing efforts due to potential regulatory risks involving its compounded weight-loss drug business. The Food and Drug Administration (FDA) might intervene, possibly affecting the company’s operations. Meanwhile, Novo Nordisk and Viking Therapeutics are well-established in the obesity drug market, potentially leading to more sustainable benefits from their products’ continued success.
