Regulatory Headwinds Challenge Hims & Hers’ Growth Strategy

The telehealth company Hims & Hers is facing significant political pressure that threatens a key segment of its business. A newly proposed bill in the U.S. Congress directly targets the lucrative market for compounded weight-loss medications, sending the company's shares down 6% over the course of a week.

A bipartisan effort in Congress is at the center of the concern. Representatives Rudy Yakym, a Republican, and André Carson, a Democrat, introduced the "SAFE Drugs Act of 2025" earlier this week. This legislation aims to restrict the production of compounded versions of approved GLP-1 medications. These pharmacy-mixed alternatives are substantially cheaper than the branded products from industry leaders Novo Nordisk and Eli Lilly and have become a major growth driver for Hims & Hers.

The market reaction highlighted the divergent impact. While Hims & Hers stock came under pressure, shares of the established GLP-1 manufacturers advanced. Analysts note the proposed law would solidify the market position of the major drugmakers by curbing lower-cost competition.

Insider Selling and Institutional Moves

Recent trading activity by company insiders presents a notable trend. Over the past six months, regulatory filings show 72 insider sales and not a single purchase. Chief Executive Officer Andrew Dudum disposed of shares worth approximately $76.5 million, while Chief Financial Officer Oluyemi Okupe sold around $19.9 million in stock.

The picture among institutional investors is mixed. JPMorgan Chase dramatically increased its stake in the third quarter, boosting its position by 549% to over 15 million shares. Renaissance Technologies also raised its holding by 32.4%. Conversely, SRS Investment Management and D.E. Shaw divested their entire positions.

Should investors sell immediately? Or is it worth buying Hims & Hers?

GLP-1 Revenue Shows Early Contraction

Hims & Hers reported third-quarter 2025 revenue of $599 million, representing a 49% year-over-year increase. However, within that total, the GLP-1 segment has already begun to shrink. Online revenue from this category was $190 million, down from $230 million in the preceding quarter.

This decline is linked to a regulatory shift. The U.S. Food and Drug Administration (FDA) declared in the fall that supply shortages for semaglutid, the active ingredient in certain weight-loss drugs, had ended. This declaration removed the legal pathway that allowed compounding pharmacies to sell their versions on a large scale. Analysts at Needham describe the company as being in a "transitional phase," scaling back its GLP-1 operations and refocusing on its core business in sexual health treatments.

Strategic Pivots: International Growth and Supplier Talks

Management is pursuing several strategies to navigate these challenges. On December 4, the company announced its market entry into Canada, followed six days later by an expansion into the United Kingdom. There, through its Hers platform, it now offers a weight management program for women that includes GLP-1 treatments.

In parallel, Hims & Hers is engaged in discussions with Novo Nordisk regarding potential supply agreements. A deal could provide the telehealth firm with access to branded medications and reduce its reliance on the compounding business. No definitive contract has been finalized to date.

Further demonstrating its strategic response, the company's board authorized a $250 million share repurchase program on November 17. Analyst sentiment remains divided, with price targets ranging from $32 (Bank of America, "Underperform" rating) to $85 (BTIG, "Buy" rating). The median target sits at $48. The release of new business figures on December 10 is expected to provide clearer evidence of how much the regulatory pressure is already impacting growth momentum.