(Reuters) -Shares of telehealth firm Hims & Hers fell as much as 5% on Tuesday after the company reported weaker-than-expected second-quarter revenue, hurt by a loss of subscribers in its weight-loss treatment as well as the sexual health business.
Hims shifted to selling smaller, “personalized” dosages of Novo Nordisk’s popular weight-loss drug, Wegovy, after the U.S. Food and Drug Administration suspended sales of the drug’s copies it had allowed during a period of drug shortage.
The company recorded $190 million in GLP-1-related revenue, down around $40 million sequentially, as it also lost subscribers on its commercially available doses of Wegovy.
Novo Nordisk in June terminated its partnership with Hims over the company’s marketing tactics and continued sales of Wegovy copies even after FDA’s ban on such sales.
Leerink Partners analysts flagged the GLP-1 revenue dip as expected. However, the market reaction was negative after the results, as investor expectations were elevated, due to a surge in shares this year.
Hims’ stock has more than doubled so far this year, while Denmark-listed shares of Novo have fallen over 50%.
The brokerage called the softness in Hims’ core business, which includes treatments for conditions related to sexual health, a negative surprise.
Hims & Hers reported a decline in its subscribers for its sexual health business, which sells generic drugs for erectile dysfunction.
Canaccord Genuity echoed a near-term caution for the company, but remained constructive on the longer-term growth potential, citing strong year-over-year gains in newer specialties such as dermatology, weight management, and daily-use sexual health solutions.
Despite the stock’s sharp post-earnings pullback, the brokerage called the move a potential buying opportunity.
Hims shares are priced at 95.85 times the company’s estimated earnings for the next 12 months, a common benchmark for valuing stocks.
(Reporting by Mariam Sunny and Mrinalika Roy in Bengaluru; Editing by Shinjini Ganguli)
Comments