Wall Street Sounds Alarm On Hims & Hers Amid Ro-Eli Lilly Zepbound Tie-Up: Retail Shrugs It Off
Leerink analysts said the Ro-Lilly partnership is likely to cause volatility for Hims & Hers shares.
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FollowShares of Hims & Hers Health Inc. slid to a three-week low on Wednesday before recovering some losses, even as retail sentiment remained ‘bullish’ despite concerns surrounding a major announcement by telehealth rival Ro.
Earlier in the day, Ro disclosed a partnership with Eli Lilly to offer Zepbound single-dose vials for obesity patients through its direct-to-consumer platform.
The deal makes Ro the first telehealth provider to integrate with LillyDirect, simplifying access to Zepbound at the self-pay price.
This marks a significant expansion for Zepbound, which had been available exclusively via Lilly’s direct channels, and positions Ro as a key player in branded GLP-1 obesity treatments.
Lilly emphasized that the move aims to ensure broader availability of FDA-approved obesity medications, citing the affordability of Zepbound compared to other branded incretin therapies.
Its Zepbound vials, priced at $399 per month, represent a 50% or greater discount compared to other incretin or GLP-1 medicines for obesity.
While some analysts see the partnership as a validation of the direct-to-consumer model, concerns loom over its implications for competitors like Hims & Hers.
Bank of America noted that selling branded drugs with slimmer margins could pressure profitability for both Ro and Hims, which currently offer compounded versions of popular GLP-1 drugs.
Leerink analysts said the Ro-Lilly partnership is likely to cause volatility for Hims & Hers shares.
They added that Hims may eventually pursue similar partnerships with manufacturers like Lilly or Novo Nordisk, potentially reducing regulatory uncertainty tied to compounded drugs but at the cost of lower margins.
Retail investors on Stocktwits largely shrugged off the concerns, with some calling the dip a buying opportunity.
Some posts highlighted that Ro’s partnership might leave Hims with less competition in the compounded GLP-1 space, as Lilly’s agreement limits Ro to branded versions only.
Hims — best known for selling treatments like hair-loss products and sexual-health medications — recently entered the weight-loss space, offering compounded versions of GLP-1 drugs like Wegovy and Ozempic.
Both Lilly and Novo have taken legal actions against compounding businesses, citing contamination risks and lack of regulatory oversight.
In addition, the American Diabetes Association has advised against using compounded GLP-1 medications, citing uncertainties in their content and effectiveness.
Still, Hims’ stock has surged over 200% year-to-date, driven by robust demand for its offerings and optimism surrounding political developments, such as President-elect Donald Trump nominating Dr. Marty Makary, a Johns Hopkins surgeon and Chief Medical Officer at Sesame, as FDA commissioner.
Sesame prescribes compounded GLP-1 weight-loss drugs by mail.
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