Big win with $hims, FDA didn’t side with pharma like everyone thought they would💊📈

**Background:**

* **GLP-1 Demand :** Wegovy (Novo) and Zepbound are dominating the branded weight-loss markets but face demand that they cannot keep up with.
* **Trump’s Legacy:** Under the Trump administration, rules around drug compounding were clarified, allowing pharmacies to fill gaps during shortages. Now, these policies will be central to ongoing lawsuits ([see this executive order](https://trumpwhitehouse.archives.gov/presidential-actions/executive-order-ensuring-essential-medicines-medical-countermeasures-critical-inputs-made-united-states/?utm_medium=email&utm_source=ncl_amplify&utm_campaign=230724-agenda47_returning_production_of_essential_medicines_back_to_america_and_ending_bidens_pharmaceutical_shortages&utm_content=ncl-7CGRrbfsEr&_nlid=7CGRrbfsEr&_nhids=NJKu9Lb)).
* **FDA issues:** The FDA pulled tirzepatide (Zepbound/Mounjaro) from the shortage list in October but has since walked back on this after legal challenges, extending the compounding window significantly.

**Why It Matters:**

* **HIMS’ Edge:** FDA uncertainty + Trump-era compounding policies = opportunity for HIMS to take over affordable GLP-1 market.
* **GLP-1 Customer base:** There are even more GLP-1 customers than expected which leaves a huge opportunity to take advantage of. There is [over 6% of the U.S.](https://www.kff.org/health-costs/poll-finding/kff-health-tracking-poll-may-2024-the-publics-use-and-views-of-glp-1-drugs/#:~:text=Overall%2C%2012%25%20of%20adults%20say,Obesity%20Drugs%20for%20Racial%20Disparities) taking a variant of it currently.
* **Hims Undervalued:** Hims is currently significantly undervalued due to the risk of lawsuits and competitors. My research into their competitors showed that they are not great considering some like RO health require a $145 month subscription to be prescribed GLP-1 which is another $300 a month subscription on top of that vs HIMS being a flat rate $200 a month which includes free chatting with a doctor anytime.
* **Hims In-house Compounding Advantage:** Hims acquired their own [compounding pharmacy](https://news.hims.com/newsroom/building-our-pharmacy-operations-with-the-customer-in-mind) to produce their drugs. This allows them to control the quality and ensure their customers get what they order which is important with compounded drugs. They recently got a [global head of quality & safety](https://investors.hims.com/news/news-details/2024/Hims--Hers-Appoints-Tenured-Pharmaceutical-Regulatory-and-Quality-Experts-to-Key-Leadership-Positions/default.aspx) who has over 30 years in pharma and FDA so the FDA cannot say it is unsafe to compound.
* **Big Pharma Hit:** Lilly and Novo stocks have been tumbling for the past few months due to the wavering support for Medicare/Medicaid covering their drugs for anti-obesity which is now very unlikely to pass with RFK being staunchly against it. It is still possible to get it if you have an added health benefit like Obesity + diabetes etc.

**Takeaway:**

* FDA delays + Trump rules = lifeline for $HIMS. The compounded drug wave could crash if regulators tighten up but the price is already undervalued. This becomes more unlikely further into the Trump presidency as cutting off a European company that has the GDP of Denmark aligns with their goals.

Oh, and Hims added meal replacements today. Branching out and adding more streams of revenue that align with their goals is a +1 in my book.

**TL;DR**: Hims & Hers ($HIMS) was up 11% as the FDA delayed its decision on Eli Lilly’s ($LLY[) Zepbound and Mounjaro shortage status](https://www.barrons.com/articles/eli-lilly-zepbound-wegovy-hims-hers-stock-8e6d9861). This pause keeps compounders going and sets precedence for HIMS when Semaglutide is removed from shortage list. There is also Trumps past executive order which will most likely be pushed through to this situation if the court cases are dragged out. European companies like Novo would be significantly impacted by this and the trump administration will take this as a win.

Positions:

1500 shares & 10 calls @$20 1/16/26