Novo Nordisk and Eli Lilly Slip as Hims Launches Low-Cost Semaglutide Alternative
Novo Nordisk and Eli Lilly Slip as Hims Launches Low-Cost Semaglutide Alternative
By:Gus Downing
Wall Street thinks the $199 alternative might disrupt the weight-loss drug market
- Hims and Hers announced this morning that it will begin offering compounded semaglutide (generic Ozempic or Wegovy) for $199 per month, effective immediately.
- Branded semaglutide costs over $1,000 per month without insurance.
- Despite the massive leg up on price, numerous regulatory hurdles are yet to be addressed and many questions remain unanswered.
Hims & Hers (HIMS) is pivoting boldly from hair loss to fat loss. The company announced this week it will begin offering compounded semaglutide for $199 per month, starting immediately for US consumers. It’s a generic version of the active ingredient in Ozempic and Wegovy, both widely prescribed GLP-1 drugs for diabetes and weight loss.
The drug has been in short supply for months, and the Food and Drug Administration (FDA) has responded by allowing to pharmacies to compound it as long as the branded version remains on the shortage list. Hims is sourcing the drug from FDA-registered outsourcing facilities and including clinician oversight and weight-loss programs in the offer.
HIMS surged more than 20% on the announcement.
Generic GLP-1s? The markets’ reaction says it all
Novo Nordisk (NVO) and Eli Lilly (LLY), the two dominant players in the GLP-1 business, both saw modest declines on the news but quickly recovered intraday. Critically, Hims’ compounded offering is not yet FDA-approved and may be viable only as long as shortages persist.
That said, it signals consumer demand and price pressure in an industry where branded semaglutide costs over $1,000 per month without insurance. Analysts note this is not a direct threat now but could signal potential disruption, especially if Hims can gain some traction and loyalty.
How long can Hims ride the GLP-1 hype?
Hims is entering a red-hot market with a huge total addressable market (TAM). Morgan Stanley estimates the GLP-1 market could soon top $100 billion annually. However, compounded semaglutide lacks brand recognition, comes with regulatory uncertainty and faces tight competition from established players.
Hims’ value proposition lies in price, access and telehealth convenience, not product superiority; if shortages ease or the FDA tightens guidelines, Hims will be forced to pivot fast or pull back entirely. Despite these potential hurdles, this move stands as a strategic risk and may be a brand-builder, even if it’s not a long-term revenue stream.
Gus Downing is host of the tastylive Network show Risk and Reward. @GainsByGus
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