Don’t buy Hims on Monday, DD inside
I will start this off by saying that I am currently long the stock. I was short the stock into Friday and had been short from $20.5 a share. I covered that short at $17.45\~ when the news hit BBG and after a couple of seconds, I immediately went long a couple of thousand shares. Right before the close at 7:59. I sold a lot of my shares and I’m left long about 800 shares and I also hold a short put. I intend to sell all of this either tonight or Monday morning even if it is at a loss, let me explain.
No matter how many times you test this idea of a partnership between the two there is no way that Hims will sell compounded Semaglutide going forward.
Friday’s news is a surrender dressed up as a deal. Go through every scenario — none of them work.
Compounding is done. There is no world where this agreement includes compounded semaglutide. Zero. The FDA removed it from the shortage list, the legal window is closed, and the whole point of Novo settling was to kill the knockoffs.
Volume isn’t going up meaningfully. Margins aren’t getting better — they’re going back to thin wholesale spreads, probably worse than the \\\~20% they were doing during the shortage, except now with a much heavier cost base from the compounding build-out they have nothing to show for.
The only hope is Novo gives them some kind of significant volume-based discount — hit enough prescriptions, get a better buy price than the other telehealth wholesalers. Maybe that’s in there. Even then it’s not moving the needle.
Side note — Hims is launching generic semaglutide in Canada in the next couple months where Novo’s patent is expiring. Interesting. Still Canada. Novo itself is launching two new brand names in order to protect the prestige of Ozempic and Wegovy so maybe there will be something there to help their launch in Canada
Market is treating this like a win. It’s not. It’s Hims waving the white flag to avoid getting destroyed in court and settling for middleman economics. If this gets bid up, it’s a short.
