Key Takeaways
- Eli Lilly will let Hims & Hers sell its Zepbound and Foundayo obesity drugs directly on its platform, and Hims shares rose 4% today.
- Novo Nordisk’s drugs are already on the platform, so Hims now sells branded drugs from both leading GLP-1 makers. That matters more for how long its weight-loss revenue lasts than for any one quarter’s results.
- The financial terms aren’t public, and branded weight loss already helped pull Hims’ gross margin down to 63.8% in the second quarter.
- Hims reports third-quarter results after the close on Monday, Nov. 9. The number to watch is adjusted EBITDA against its $75 million to $95 million guide.
Eli Lilly (LLY) just picked Hims & Hers Health (HIMS) as a storefront for its obesity drugs. Hims shares rose 4% today after the two companies said patients prescribed Zepbound or Foundayo on Hims can now buy them without leaving the site. The news came three days before Hims reports.
The deal puts Lilly on the same footing as Novo Nordisk (NVO), which has sold Wegovy and Ozempic through Hims since March. That means Hims now carries branded drugs from both of the big GLP-1 makers. Leerink Partners analyst Michael Cherny called the deal “a clear positive.”
I agree, and I think it matters far more for how durable Hims’ revenue is than for anything Monday’s report will show.
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What exactly happened
Lilly and Hims laid out the terms in their joint release:
- Patients who get a prescription from a provider on Hims can now buy Zepbound or Foundayo there and have it shipped home. Before, they had to leave for LillyDirect, Lilly’s own cash-pay site.
- Self-pay prices start at $149 a month for Foundayo, Lilly’s daily pill, and $299 a month for Zepbound, its weekly injection. Those are the same prices as on LillyDirect.
- Hims committed not to offer compounded copies of Lilly’s GLP-1s. It says it has never sold them.
- Neither company disclosed the financial terms.
Ilya Yuffa, president of Lilly USA, told Reuters that “the ease and ability for someone on the Hims & Hers platform today to get Lilly medicine is not fully straightforward.” He added that any friction raises the chance a patient gives up.
In other words, Lilly would rather not lose a patient between two websites.
Hims finally has both drugmakers on board
Hims built its US weight-loss business on compounded GLP-1s, and it has had to rebuild that business this year. In February, the FDA said it intends to restrict GLP-1 ingredients used in compounded drugs that are mass-marketed as alternatives to approved ones, and it named Hims. In March, Hims shifted its US weight-loss business to Novo’s branded drugs and stopped advertising compounded GLP-1s.
Now the market leader has signed on too. Hims has a supply line that both drugmakers support, which it never had while it sold compounded drugs.
Analysts expect Hims’ revenue to nearly double from 2025 to 2028:
With both leading GLP-1 makers now selling through Hims, I find those later years a lot easier to believe.
Why Lilly wants in
Lilly gets something out of this too. The company says 40% to 45% of Zepbound sales come through self-pay channels, the cash-pay market Hims sells into.
Lilly is also the leader in this market. Investor Hari Ramachandra said on a recent episode of the We Study Billionaires podcast: “Eli Lilly has taken up 60% of the market share.” Last week, Lilly raised its full-year revenue forecast by $5 billion.
Analysts expect Lilly’s revenue to reach $91.7 billion this year, a completely different scale from Hims:
For Hims, even a small share of Lilly’s self-pay demand would be a big deal.
Novo has company now
For Novo, Hims patients can now choose Zepbound or Foundayo on the same site as Wegovy. Novo moved fast on the platform: Hims management said on its first-quarter call that it fulfilled more than 125,000 Wegovy shipments within six weeks of adding Novo’s drugs.
Novo is still cheaper on the injection, at $199 a month for the Wegovy pen against $299 for Zepbound. Both pills start at $149, and Novo had about a three-month head start, since Foundayo launched in April. Novo has also sold millions more obesity pills in the US.
The question for Novo’s next report is whether it can hold on to its share of Hims’ weight-loss patients now that Lilly’s drugs are on the same site.
The catch is margin
Hims’ gross margin peaked at 82.0% in 2023 and fell to 73.8% by 2025:
It fell further this year, to 63.8% in the second quarter from 76.4% a year earlier. Management said the drop came from branded weight loss and international sales making up a bigger share of the business. Gross profit still grew 16% that quarter, but revenue grew 38%.
I expect Lilly’s drugs to follow the same pattern. Hims sells them at LillyDirect’s prices, so it can’t compete on price, and neither company has said what Hims keeps from each sale. My read: Zepbound and Foundayo will add revenue and subscribers at a thinner margin, just as Novo’s drugs did.
What Monday has to show
Hims reports after the close on Monday, Nov. 9. The Lilly deal is too new to show up in third-quarter numbers, so the report will mainly show what the Novo business is doing to profits.
Hims guided to $880 million to $900 million of revenue and $75 million to $95 million of adjusted EBITDA for the quarter. It has also cut its full-year adjusted EBITDA guidance twice this year while raising its revenue guidance. If gross margin holds near the second quarter’s level, I’d take that as a sign Hims has absorbed most of the branded hit.
Bottom line: in February Novo was suing Hims, and in November Hims is selling both Novo’s and Lilly’s drugs. I think that’s worth more to the stock over the next few years than any one quarter’s margin.
Of course, if adjusted EBITDA lands at the low end of the guide, or Hims cuts its full-year outlook again, investors will want to know what Lilly’s drugs pay before they give Hims credit for the deal.
So what is Hims & Hers stock actually worth?
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