HIMS Stock Slides after Wegovy Subscription Launch; BofA Sees 31% Drop in GLP-1 Franchise

Low-cost healthcare services provider Hims & Hers HIMS -1.25% ▼ on Thursday disclosed the availability of approved versions of Novo Nordisk’s NVO +1.05% ▲ GLP-1 medications. However, HIMS shares edged lower after Bank of America BAC -0.72% ▼ said the price of its new membership subscription for the Danish drugmaking giant’s Wegovy weight-loss drug was “slightly higher than we initially expected.”

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Hims & Hers Launches $149 Per Month Wegovy Subscription

The new subscription is priced at $149 per month, minus the cost of the medication itself, BofA analyst Allen Lutz noted. GLP-1, or glucagon-like peptide-1, is a hormone that manages blood sugar and appetite and plays a key role in obesity and diabetes management medications.

Earlier this month, Hims & Hers pulled a surprising deal to sell Novo Nordisk’s diabetes medication Ozempic and Wegovy on its platform, settling an earlier lawsuit over the American company’s compounded version of the obesity drug. However, Lutz, who is a five-star analyst, noted that Hims & Hers’ new membership subscriptions for obesity come in modestly higher than those of its rival Ro.

BofA Projects 31% Fall in Hims & Hers’ GLP-1 Franchise

Apart from being a top-rated analyst, Lutz boasts a 63% success rate and an average return of 11.80%. He ranks 685 out of the more than 12,000 Wall Street analysts tracked by TipRanks.

The analyst sees Hims & Hers’ GLP-1 franchise shrinking by 31% by the end of this year. He noted that his estimates might turn out to be even more conservative, considering that the San Francisco, California-based company is moving from being a low-cost healthcare services provider to being an average-cost one.

As a result, Lutz maintained his Neutral (Hold) rating on HIMS stock. Several analysts previously raised their ratings on HIMS stock following the Novo Nordisk deal, citing reduced legal risks.

Is HIMS a Strong Buy?

Across Wall Street, analysts continue to approach Hims & Hers’ shares with caution and currently have a Moderate Buy rating on the stock. This is based on four Buys and 10 Holds assigned over the past three months.

However, the average HIMS price target of $26 implies about 28% upside from current trading levels.

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