New CEO at Weight Loss Giant

Hims & Hers Health, Inc.(NYSE: HIMS) is up 13% since Monday morning.

The stock started to climb on the news that the company was adding Kåre Schultz to its Board of Directors. Schultz spent over 25 years at Novo Nordisk, where he served as President and COO as the company established itself as a leading company in diabetes care.

Schultz was also the former CEO of generic drug maker Teva Pharmaceutical Industries Ltd. Hims is adding Schultz to the board because the company is pursuing a new strategy in the weight loss drug market.

Thanks to the limited supply of these high-demand and expensive brand-name drugs, Hims has decided to take advantage of a section of the Food, Drug and Cosmetic Act that allows for the sale of compounded versions of medications that are facing a shortage.

Compounding is the customization of an approved drug by a pharmacist or physician to meet the specific needs of an individual patient. Using this process, Hims is selling a compounded version of semaglutide, the active ingredient in these drugs, $199 for a month’s supply.

To put that into perspective, the two leading drugs in this category, Ozempicand and Wegovy, cost nearly $1,000 and $1,349 respectively, and that’s why in a press release Schultz said, “Hims & Hers is on a trajectory to upend the healthcare industry”.

When asked if Hims will still be able to make compounded semaglutide after the shortages end, Schulz said he wasn’t worried because there would still be cases where patients needed individualized prescriptions.

That means Hims has the chance to profit from this trend in weight loss drugs for the foreseeable future.

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