Shares of Hims & Hers Health (HIMS) and LifeMD (LFMD) experienced significant gains on Tuesday, with the companies’ stocks rising by 24% and 34%, respectively, by 3:15 p.m. ET. This occurred as the S&P 500 and the Nasdaq Composite posted modest increases.
The rise in shares followed an announcement from pharmaceutical company Novo Nordisk, stating it would distribute its GLP-1 weight loss drug Wegovy through telehealth platforms, including Hims & Hers and LifeMD.
Popularity of Wegovy
Novo Nordisk has decided to sell Wegovy through telehealth providers such as Hims & Hers Health, LifeMD, and Ro, simplifying access for patients to the popular anti-obesity medication. Following the resolution of a previous supply shortage, the drugmaker aims to expand its reach. Patients will have access to Novo’s direct-to-consumer pharmacy, NovoCare, through Hims & Hers, LifeMD, and similar platforms.
All dosage levels of Wegovy will be available from Hims & Hers, starting at $599 per month, which includes 24/7 care, nutritional guidance, and ongoing clinical support. LifeMD announced that offering Wegovy enhances its ability to support patients with a brand-name GLP-1 option at a recently reduced self-pay cost of $499 per month, including home delivery.
Investor Perspective
Hims & Hers experienced a sales surge after a supply shortage of GLP-1 drugs like Wegovy allowed the telehealth provider to sell compounded versions. The end of the shortage halted these sales, but the new partnership with Novo Nordisk revives a vital revenue stream and could enhance financial performance.
LifeMD’s stock performance has been less volatile, showing a decline over the past year. Despite competitors gaining access to Wegovy, Hims & Hers is likely to benefit most, due to its brand recognition and customer base. However, its stock trades at a high 53.7 times earnings and 4.6 times sales, which may be considered expensive. In contrast, LifeMD’s shares trade at just 1.2 times earnings, and despite operating at a loss, the company is progressing positively.
Johnny Rice holds no positions in any of the mentioned stocks. The Motley Fool recommends Novo Nordisk, adhering to its disclosure policy.
