To The Moon

On April 1st, $Hims & Hers Health Inc.(HIMS)$ stock surged because the company announced it's adding $Eli Lilly(LLY)$ 's weight-loss drug Zepbound to its telehealth platform.

Here’s the scoop:

Stock Surge

• Stock Performance: $Hims & Hers Health Inc.(HIMS)$ ' stock closed up 5.1% at $31.05 on April 1st, hitting a high of 14% during trading.

• Trading Volume: The company saw a huge spike in trading volume that day, reaching $144.4 million, up 150.91% from the previous day and ranking 35th in trading volume.

Why Add the Drug?

• Previous Business: Hims & Hers used to make a killing selling a generic version of $Novo-Nordisk A/S(NVO)$ 's weight-loss drug Wegovy. They could legally mix up these drugs because of a shortage, and it brought in a ton of cash.

• Policy Change: The FDA announced in February that the shortage of Wegovy and Ozempic from Novo Nordisk was over. So, Hims & Hers had to find something else to sell to keep their weight-loss business going.

• New Drugs: They're now selling Eli Lilly's Zepbound (with tirzepatide) and a generic version of Novo Nordisk's diabetes drug liraglutide. Zepbound costs $1899 a month.

Market and Investor Reactions

• Positive Impact: Adding Zepbound and liraglutide is a big move for Hims & Hers to expand their weight-loss offerings. It helps them keep their customers and stay relevant in the weight-loss market after the Novo Nordisk shortage ended.

• Investor Optimism: Even though Zepbound is pricey, investors are hopeful that selling it and other alternatives will make up for any lost revenue.

• Analyst Caution: Some analysts are a bit skeptical about the long-term financial impact. For example, $Bank of America(BAC)$ still rates the company as "underperform" with a target price of $22. They think branded drugs might not be as profitable as generics.

Looking Ahead

• Business Expansion: Hims & Hers plans to keep growing their weight-loss lineup to offer more comprehensive health services. They’re aiming for at least $725 million in revenue from weight-loss drugs by 2025.

• Increased Competition: With Zepbound on board, competition in the weight-loss market is heating up against rivals like Teladoc and LifeMD.

The Bottom Line

By adding Eli Lilly's Zepbound, Hims & Hers managed to ease the pressure from the end of the Novo Nordisk shortage. It also gave investors a confidence boost and sent the stock price soaring.