Hims & Hears Health (HIMS) broke its uptrend that began in August at around $42. The stock peaked at over $60, only to close at $42.35 on Oct. 17.
CEO Andrew Dudum sold 175,661 shares, worth around $11 million, on Oct.16. Investors might take advantage of the dip. Still, the CEO commented about a possible short squeeze on HIMS stock. But the next day, he sold shares.
In the obesity sector, investors sold shares of Novo Nordisk A/S (NVO). On Oct. 17, the U.S. President said that fertility treatment drugs would be reduced. However, he said that Ozempic prices could fall to just $150 a month. The drug usually costs $1,000 monthly.
Eli Lilly (LLY) fell in sympathy with the NVO stock decline. Eli sells obesity drugs as well. That includes Mounjaro and Zepbound.
The mandated price announcements are effectively a price control. This would deter drug companies from spending on research and development. It sets back the efforts of bringing new drugs to the market. Eli and Novo might sell their drugs in other countries instead. However, they may need to offer them at lower prices. Despite that headwind, this is still a more profitable decision than selling the product in the U.S.
Your Takeaway
Investors may want to avoid obesity drugs while the threat of imposing lower prices looms. Investors already dumped shares of Pfizer (PFE). They initially bought the stock after TrumpRx included some of its products. The stock spiked from $24 to nearly $28 but erased those gains throughout October.
