Hims & Hers (HIMS.US) fourth quarter performance exceeds expectations, suspension of composite weight loss drug leads to significant drop in stock price.

Remote healthcare company Hims & Hers Health (HIMS.US) announced its fourth-quarter performance for 2024. The data shows that the company's Q4 revenue increased by 95% year-on-year to $481 million, beating market expectations of $470 million; earnings per share were 11 cents, also surpassing market expectations of 10 cents. However, the company's gross margin was 77%, lower than the market expectation of 78.4%. Hims & Hers stock recently plummeted. Last Friday, after the U.S. Food and Drug Administration (FDA) announced that the shortage issue of semaglutide injection products had been resolved, the company's stock price dropped by 26%. In May of last year, Hims & Hers began selling semaglutide complex drugs. Semaglutide is the active ingredient in Novo Nordisk A/S Sponsored ADR Class B's blockbuster GLP-1 drugs Ozempic and Wegovy. Hims & Hers became a rising star in the digital health field in 2024, partly due to the success of its new weight loss products. The company stated that its GLP-1 products generated over $225 million in revenue in 2024. The stock rose by approximately 200% that year. It is reported that when there is a shortage of brand-name drugs, regulatory agencies allow drug companies to produce complex drugs to meet the specific needs of patients. The U.S. Food and Drug Administration announced last Friday that it will take action against manufacturers of complex drugs who violate regulations in the next 60 to 90 days. Hims & Hers stated during the earnings conference call that after the first quarter, its platform may not offer semaglutide complex drugs. Hims & Hers CEO Andrew Dudum said during the conference call, "We will start informing customers in the next month or two that they need to start looking for commercial dosages alternatives. I guess many patients will try to enter the open market and try some brand-name drugs." The company added that some patients may still be able to use semaglutide complex drugs if there is a clinical need. Hims & Hers weight loss products mainly consist of oral medications and generic version of liraglutide, and the company plans to launch liraglutide on its platform this year. Hims & Hers stated that without including semaglutide complex drugs, they expect their weight loss products to generate at least $725 million in revenue in 2025. Hims & Hers also provides skincare, mental health, sexual health, and hair care products. Looking forward, Hims & Hers expects first-quarter revenue for 2025 to be between $520 million and $540 million, while analysts' expectations are $497 million. The company stated that adjusted EBITDA will be between $55 million and $65 million. As of the time of writing, Hims & Hers stock has dropped by 18.14% after-hours.