Legal battle + Novo Nordisk A/S Sponsored ADR Class B (NVO.US) low-priced pharmacy "double kill" Citigroup maintains a "sell" rating on Hims & Hers (HIMS.US)

On Monday, Citigroup analyst Daniel Grosslight confirmed a "sell" rating and a target price of $27.00 for Hims & Hers Health, Inc. (HIMS.US). Grosslight's statement involved the latest legal developments regarding the drug tirzepatide, which has become the subject of a court case due to its status on the FDA shortage list. The Office of Federal Prosecutors (OFA) has decided to challenge the decision by the Texas Northern District Court to support the FDA's decision to remove tirzepatide from the shortage list. The OFA plans to submit this case to the Fifth Circuit Court of Appeals, focusing on several key arguments including the FDA's decision-making process, oversight of shortage evidence, the alleged arbitrary nature of the decision, and the FDA's reliance on data from the drug manufacturer Eli Lilly (LLY.US). Despite facing these legal challenges, InvestingPro data shows that HIMS maintains strong fundamentals with a gross margin of 79.45% and a revenue growth rate of up to 69.32% over the past 12 months. Despite these arguments, Grosslight remains skeptical about the likelihood of the OFA successfully overturning the district court's ruling. He cites the strong reasons given by the district court as the primary reason for his doubt that the appeal will result in any significant change in tirzepatide's status. The legal disputes surrounding tirzepatide have garnered the attention of investors and industry observers as the outcomes could affect the business operations of Hims & Hers. Tirzepatide is a drug used to treat diabetes, and its availability impacts both patients and healthcare providers. The ongoing legal litigation and Citigroup's reiterated sell rating may affect the stock price and investor sentiment of Hims & Hers. As the case progresses through the appeals process, the market will continue to monitor any developments and potential impacts on the company and its stakeholders. In other recent news, Hims & Hers Health, Inc. is facing significant developments that could impact its operations and market position. Most recently, a court ruled in favor of the FDA in a case concerning the tirzepatide compound, affecting Hims & Hers' ability to offer similar compounds like semaglutide. Citigroup and Bank of America Corp Securities have maintained their sell and underperform ratings respectively, with target prices of $27 and $21, citing potential challenges from the ruling. The company plans to focus on personalized semaglutide therapy under the compound exemption, aiming to achieve an estimated revenue of $725 million from weight loss products by 2025. Meanwhile, Novo Nordisk A/S Sponsored ADR Class B (NVO.US) launched NovoCare Pharmacy to provide Wegovy at competitive prices, posing a new challenge to Hims & Hers. This move is seen as intensifying competition in the pharmaceutical sector directly targeting consumers, potentially impacting the market dynamics of Hims & Hers. The launch of NovoCare Pharmacy is part of Novo Nordisk A/S Sponsored ADR Class B's strategy to increase drug affordability and accessibility, further intensifying the competition for Hims & Hers. Analysts from Citigroup and Bank of America Securities point out that increased competition and regulatory scrutiny could affect Hims & Hers' future revenue growth. As the industry adapts to these changes, strategic responses from Hims & Hers will be crucial in addressing these challenges.