Dr. Martin Makary, currently serving as the chief medical officer for the telehealth company Sesame, has been tapped by President-elect Donald Trump to lead the Food and Drug Administration (FDA). This nomination, announced on Friday, seem to have positively impacted shares of Hims & Hers Health (HIMS), which saw an 18.50% increase to $30 in trading on Monday. Despite the stock having already surged more than 237% in value year-to-date, this news appears to have acted as a catalyst for further gains.
Both Sesame and Hims & Hers Health have engaged in the sale of compounded versions of GLP-1 medications, like semaglutide, which is found in Novo Nordisk’s popular drugs Ozempic and Wegovy. These companies have navigated through a regulatory loophole allowing pharmacies to compound drugs when there is a shortage, thereby offering alternatives to patients unable to access the brand-name medications.
Bank of America (BAC) analyst Allen Lutz commented on the potential implications of Makary’s nomination, suggesting that having an FDA head with direct experience in a company involved in GLP-1 compounding could be “incrementally positive” for the future of this sector. However, Lutz remains cautious, noting that Makary’s confirmation is not guaranteed, nor is there certainty that the FDA would adopt a more favorable stance on GLP-1 compounding under his potential leadership. Despite the positive market reaction, Lutz maintains an “underperform” rating on Hims & Hers Health stock, indicating a nuanced view on the long-term impact of this nomination.
This development could signify a shift in how compounded medications, especially those in high demand like GLP-1 drugs, are regulated. If confirmed, Makary would be in a position to influence policy in a way that might either support or challenge the current practices of companies like Hims & Hers Health and Sesame. This situation highlights the intricate relationship between regulatory decisions and market dynamics in the pharmaceutical and telehealth sectors.
h/t CNBC
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