On Friday, shares of Hims&Hers Health Inc (NYSE: HIMS) dropped over 20% following an FDA announcement that the supply shortage of Novo Nordisk (NYSE: NVO)'s weight loss and diabetes drugs was ending. Due to this, the sale price and availability of Ozempic and Wegovy are impacted, which disallows Hims and Hers from selling exact replicas of the semaglutide drugs at a lower price.

In response to the news, BofA analyst Allen Lutz maintained an Underperform rating and a price target of $21.00, citing the news as a "clear negative" for Hims&Hers' GLP-1 opportunity.

Lutz iterated that semaglutide drugs are expected to account for nearly half of gross sales for the company in Q2. He also cited that the company's core product line has decelerated to represent only 30% gross sales as of January.

Leerink Partners analyst Michael Cherry answered the news with similar concern, stating, "For HIMS (MP) and the broader GLP-1 compounding space, this development starts the clock on having unfettered market access to the patented drug."

The analyst appeared skeptical of the stock's immediate future, adding, "From here, we do see potential for a reset in the stock after it had been clearly driven up by excitement over the broader weight loss opportunity." Cherry reiterated a price target of $24.00 and a Market Perform rating, and advocated for understanding of Hims and Hers' potential legal pathway.