Citi says Lilly Zepbound offering ‘shot across the bow’ for compounders

Citi analyst Daniel Grosslight views Eli Lilly’s (LLY) announcement that it is making Zepbound single dose vials available for self-pay patients with an on-label prescription as a “shot across the bow for the GLP-1 compounders.” Lilly is introducing the vials, in part, to protect patients from “counterfeit, fake, unsafe or untested knock-offs,” which Citi says is a “not-so-subtle dig at the compounders.” While the firm does not think this will have an immediate impact on Hims & Hers’ GLP-1 offering, it does think Lilly has a “compelling offering for patients who want the certainty of a branded drug and do not want to commit to multi-month orders for a lower price.” Citi also notes the Lilly pricing does not include the price of the doctor’s visit to obtain a prescription while Hims & Hers’ pricing does. The firm anticipates Lilly’s offering will take share away from the compounders given patients will likely opt for the branded over compounded tirzepatide as pricing is a bit more flexible and certainty of supply. Shares of Hims & Hers are down 5% to $15.20 following Lilly’s announcement. Citi keeps a Neutral rating on the stock with a $20 price target.