Baby boomers are about to be the largest generation in American history to hit the long-term care space. Born between 1946 and 1964, as defined by Pew Research, the oldest baby boomers are turning 80 next year. The group is set to flood a senior care space that is already understaffed, underfunded and facing political uncertainty.

“This space is completely underprepared for the number of older adults that are going to need long term care and end of life care,” said David Grabowski, professor of health care policy at Harvard Medical School. “We’ve historically relied heavily on families. There’s not going to be the number of family members that we’ve had in the past.”

Now private equity is increasingly looking to get in on the market. A recent study found between 2015 to 2022, 47 private equity firms bought 124 U.S. hospice agencies. Today an estimated 75% of U.S. hospice agencies are for-profit, according to a study out of the University of Pennsylvania.

“Hospice was started as a grassroots, nonprofit movement where the majority of care, a couple decades back, was provided by strictly non-profits,” said Robert Tyler Braun, assistant professor in the division of health policy and economics at Weill Cornell Medicine. “In this current landscape now, the majority of hospice providers are for profit.”

Nursing homes and long-term care facilities have long been an acquisition target for private equity and publicly traded companies. Data provided to CNBC by Coherent Market Insights shows those same trends in the hospice care space have picked up significantly since the 2010s.

Watch the video above to learn how these investments are impacting the space, who is investing in it, and what it means for seniors and their families.

Health-care software vendor Athenahealth on Tuesday said it will offer Abridge’s artificial intelligence scribing tool to its network of more than 160,000 clinicians. 

Athenahealth has developed an electronic health record, revenue cycle management tools and patient engagement tools for ambulatory care providers, which include outpatient facilities like independent practices. The company introduced a solution called Ambient Notes in October that allows doctors to choose between various AI-powered documentation tools, and Abridge is the latest addition. 

Abridge uses AI to draft clinical notes in real time as doctors consensually record their visits with patients. The startup is part of a red-hot market that has exploded as health-care executives search for solutions to help reduce staff burnout and daunting administrative workloads. 

“The market is going to evolve rather rapidly, there are going to be winners and losers over time,” Athenahealth CEO Bob Segert told CNBC. “Different physicians will prefer different ways that notes are taken and that the information is delivered, and we want to be able to provide that flexibility.”

Athenahealth and Abridge declined to share the financial details of the partnership. 

Clinicians spend nearly nine hours a week on documentation, according to an October study from Google Cloud. And more than 90% of physicians report feeling burned out on a “regular basis,” according to a survey commissioned by Athenahealth last February. 

Companies including Abridge, Microsoft’s Nuance Communications, Suki and others say their AI scribing tools can help. Suki and iScribeHealth already offer their tools through Athenahealth’s Ambient Notes solution. 

“It’ll be incumbent upon us to make sure that we’re able to demonstrate differentiation,” Abridge CEO Dr. Shiv Rao told CNBC. “So far, we’ve had good luck these last few years doing that.”

Abridge has deployed its technology across more than 100 health systems in the U.S., including organizations like the Mayo Clinic, Duke Health and Johns Hopkins Medicine.

The company announced a $250 million funding round earlier this month. It also unveiled a new Contextual Reasoning Engine that can pull information that’s relevant to a specific clinician and their clinic’s best practices. Abridge’s Rao said that technology will be available to Athenahealth clinicians. 

Athenahealth’s Ambient Notes solution is currently available in a limited capacity, but the company said it plans to widen availability for clinicians through 2025. 

“The more they try it, the more they like it, and I think we’re going to see a pretty steep adoption curve as this continues to move forward,” Segert said.

Eli Lilly on Wednesday said it will invest at least $27 billion to build four new manufacturing sites in the U.S., as demand for its blockbuster weight loss and diabetes injections soars and the company develops new drugs for other conditions.

It comes as drugmakers and companies across different industries work to build goodwill with President Donald Trump, who has emphasized reshoring manufacturing to the U.S. and reducing reliance on foreign supply chains. He has threatened companies — and pharmaceutical businesses in particular — with tariffs if they do not manufacture products in the U.S.

Eli Lilly made the announcement at an event in Washington, D.C. — emphasizing the political undertones of the strategy. The event featured several speakers from the Trump administration, including Kevin Hassett, director of the White House National Economic Council, and Commerce Secretary Howard Lutnick, who explicitly tied the announcement to Trump’s policies.

Lutnick said the investment is “exactly what the Trump administration is all about, which is building and manufacturing and reshoring in America, investing in America, building in America.” He thanked Eli Lilly for “doing exactly what the president was hoping would happen.”

Lutnick added that “if you want to understand the tariff policy” of the U.S., “I have just articulated it.”

The move brings Eli Lilly’s total U.S. manufacturing investments to more than $50 billion in recent years. The other $23 billion is from the company’s investments in new plants and site expansions since 2020, which has helped ease supply shortages of its popular drugs.  

“This represents the largest pharmaceutical expansion investment in U.S. history,” Eli Lilly CEO David Ricks said at the event. “We’re making these investments … to prepare for the demand we anticipate for future pipeline medicines across our therapeutic areas.”

Shares of the company closed more than 1% higher on Wednesday.

Three of the future U.S. sites announced Wednesday will manufacture active ingredients in medications, such as tirzepatide, the active ingredient in Eli Lilly’s obesity drug Zepbound and diabetes treatment Mounjaro. Ricks noted that there is a “real gap in supply chain in the U.S. as it relates to active ingredient availability in our country.”

The fourth site will extend the company’s global manufacturing network for future injectable therapies, he added.

Eli Lilly has not decided on where the four new U.S. sites will be located, Ricks said. The company will be accepting location submissions through March 13 and will announce decisions on new sites in the coming months.

Eli Lilly said the four new sites will create more than 3,000 jobs for workers such as engineers and scientists, along with 10,000 construction jobs as the plants are built. The company’s other U.S. plants include sites in North Carolina, Indiana and Wisconsin.

The new investments aren’t solely dedicated to Eli Lilly’s current and future obesity and diabetes treatments. The company is charting its future beyond Zepbound and Mounjaro, with hopes to deliver drugs from its broad pipeline of products for cancer, Alzheimer’s disease and other conditions.

Ricks said the company is optimistic about its pipeline across therapeutic areas, including cardiometabolic health, oncology, immunology and neuroscience.

Still, the new investments build on the success of Zepbound and Mounjaro, which share dominance of the booming market for so-called GLP-1 drugs with Novo Nordisk‘s weight loss drug Wegovy and diabetes treatment Ozempic. Some analysts expect the global obesity drug market to be worth more than $150 billion annually by the early 2030s, making it critical for both companies to maintain their share as other drugmakers scramble to join.

During the event, Ricks took a shot at cheaper compounded versions of its injectable drugs, saying “America faces a growing threat from an influx of counterfeit and compounded medications.”

Eli Lilly’s efforts to boost the supply of Zepbound and Mounjaro aim to ensure that eligible patients are safely accessing those branded treatments instead of cheaper compounded versions. Patients flocked to those unapproved copycats when the branded drugs were in short supply, or if they didn’t have insurance coverage for the costly treatments. 

The FDA has since declared the shortage of tirzepatide over, which will essentially bar many compounding pharmacies from making copycats. 

Hassett said the issue also “disturbs the White House” because offshore producers of copycat drugs are “threatening lives in the U.S.”

In another sign of the political goals of the announcement, Ricks touted Trump’s 2017 Tax Cuts and Jobs Act, saying that the legislation has been “fundamental” to the company’s manufacturing investments. He called it “essential that these policies are extended permanently this year.”

Key provisions from that law are set to expire at the end of December — though a reduction in the corporate tax rate will remain in effect.

That legislation, passed by a majority-Republican Congress during Trump’s first term, was the largest tax code overhaul in nearly three decades that slashed taxes for individuals and businesses. It cut the corporate tax rate to 21%, capped deductions for state and local taxes at $10,000, and expanded the child tax credit, among other efforts. 

“Long-term progress will also require U.S. policies to continue to protect the intellectual property rights and foster an innovative environment where we can do our work,” Ricks said.

Novo Nordisk has similarly invested billions in manufacturing to ramp up supply of Wegovy and Ozempic, announcing in 2024 it would take over three sites from contract manufacturer Catalent for $11 billion.

Teladoc Health shares fell in extended trading on Wednesday after the company reported a wider loss than analysts expected and issued disappointing quarterly guidance.

Here’s how the company did, compared to analysts’ consensus estimates from LSEG:

• Loss per share: 28 cents vs. 24 cents expected
• Revenue: $640.5 million vs. $639.6 million expected

Revenue at the telehealth company decreased 3% in the fourth quarter from $660.5 million during the same period last year, according to a release. Teladoc’s net loss widened to $48.4 million, or 28 cents per share, from a loss of $28.9 million, or 17 cents per share, a year ago.

Teladoc is in the middle of a deep slump, with its stock price dropping in each of the past four years due to hefty competition in remote health, challenges at mental health division BetterHelp and high operating costs.

When Teladoc acquired digital health company Livongo in 2020, the companies had a combined enterprise value of $37 billion. Teladoc’s market cap was around $1.9 billion as of market close on Wednesday.

“As we look forward in 2025, execution will continue to be a top priority as we advance efforts to unlock growth opportunities and position the company for long term success,” Teladoc CEO Chuck Divita said in the statement. “We will also remain focused on our cost structure, building on the significant improvements achieved in 2024 over the prior year.”  

Teladoc reported adjusted earnings of $74.8 million in its fourth quarter, a 35% decrease from a year ago. Adjusted earnings for the company’s Integrated Care segment declined 5% to $53.2 million, and BetterHelp saw adjusted earnings drop 63% to $21.7 million.

For the first quarter, Teladoc said it expects revenue of between $608 million and $629 million, while analysts were expecting $632.9 million. The company said adjusted earnings will be between $47 million and $59 million for the period.

Earlier this month, Teladoc announced it will acquire preventative care company Catapult Health in an all-cash deal for $65 million. Teladoc said its outlook includes the anticipated contribution from the deal but not the effect of potential impairments or purchase accounting. Teladoc said the acquisition should close at the end of the month.

Teladoc will host its quarterly call with investors at 4:30 p.m. ET.

— CNBC’s Bertha Coombs contributed to this report.

WATCH: Cramer weighs in on Teladoc

A crucial March meeting of vaccine advisors to the Food and Drug Administration has been canceled without explanation, a member of the advisory panel told CNBC on Wednesday. 

The meeting of the Vaccines and Related Biological Products Advisory Committee, or VRBPAC, is held every March to select flu strains for shots released in the upcoming fall and winter. 

But Dr. Paul Offit, a member of that panel, told CNBC that he received an email at 4:18 p.m. ET on Wednesday saying that the upcoming March 13 meeting is canceled. He said there was no indication of whether it will be rescheduled.

“Who canceled this meeting? Why did they cancel the meeting? Will manufacturers now turn to the World Health Organization to determine strains for this year’s influenza vaccines?” Offit told CNBC. 

The Department of Health and Human Services did not immediately respond to a request for comment.

The canceled meeting comes as Robert F. Kennedy Jr., who now leads HHS, makes early moves that could affect vaccination uptake and policy in the U.S. Kennedy has a lengthy track record of being a vaccine skeptic. 

It also comes amid a particularly brutal flu season in the U.S. CDC data shows the flu has caused up to an estimated 910,000 hospitalizations since October, which puts the season on track to be the most severe in at least a decade.

Earlier this month, a separate meeting of advisors who help the Centers for Disease Control and Prevention make recommendations for vaccines was postponed to “accommodate public comment in advance of the meeting,” several news outlets reported. It is also unclear if that meeting will be rescheduled. 

Kennedy also said last week that he will review the childhood vaccine schedule despite earlier pledges not to do so. He promised that a new “Make America Healthy Again” commission would investigate vaccines, pesticides and antidepressants to see if they have contributed to a rise of chronic illness in the U.S.

Meanwhile, the Trump administration is weighing pulling funding for Moderna’s bird flu vaccine, Bloomberg reported on Wednesday.

The country is grappling with a record-breaking bird flu outbreak that’s impacted dozens of cattle herds along with poultry flocks, which has sent egg prices skyrocketing. Its rapid spread in animals has raised concerns about broader spread to humans.”

Shares of Hims & Hers Health closed down 22% on Tuesday, a day after the telehealth company released fourth-quarter results that disappointed on gross margin and sparked concerns about the future of its weight loss business.

Hims & Hers reported $481 million in revenue for the quarter, up 95% from $246.6 million during the same period last year. Net income climbed to $26.01 million, or 11 cents per share, from $1.25 million, or 1 cent per share, a year prior. 

But the company’s gross margin, or the profit left after accounting for the cost of goods sold, was 77%, disappointing analysts who were expecting 78.4%, according to StreetAccount.

In the company’s quarterly call with investors on Monday, Chief Financial Officer Yemi Okupe said the scaling of the company’s GLP-1 offering and its strategic pricing options were to blame.

Hims & Hers in May started prescribing compounded semaglutide, the active ingredient in Novo Nordisk‘s GLP-1 weight loss medications Ozempic and Wegovy. Compounded drugs can be produced when brand-name treatments are in shortage, but the U.S. Food and Drug Administration announced Friday that the shortage of semaglutide injection products has been resolved.

As a result, Hims & Hers said Monday that it will likely stop offering compounded semaglutide on its platform after its first quarter, though some consumers may still be able to access personalized doses if clinically applicable. The GLP-1 offering generated more than $225 million in revenue for the company in 2024.

“We will have to start notifying customers in the coming month or two that they will need to start looking for alternative options on the commercial dosing,” Hims & Hers CEO Andrew Dudum said on the call. 

Going forward, the company said its weight loss offerings will primarily consist of its oral medications and the injectable medication liraglutide, which it plans to introduce on its platform this year.

Analysts at Morgan Stanley said in a note Tuesday that the company’s report was “a lot to digest.” They maintained their equal-weight rating on the stock and said they were surprised by the magnitude of the company’s 2025 guidance.

Hims & Hers said it expects between $2.3 billion and $2.4 billion in revenue this year. The company added that it expects its weight loss offerings to generate at least $725 million in revenue, excluding contributions from compounded semaglutide.

“We remain positive on the long-term opportunity, highlighting the company’s attractive platform and solid track record that differentiate it relative to digital health and DTC comps,” the Morgan Stanley analysts said.

Bank of America analysts said that while the company might have some success transitioning patients to its other weight loss offerings such as its oral medications, it will face a “significant execution risk” as supply of brand-name GLP-1s increases.

Additionally, the analysts said Hims & Hers’ competitors will likely shift marketing dollars back to other products for conditions such as erectile dysfunction and hair loss, which could put pressure on its advertising costs. They reiterated their underperform rating on the stock.

“Overall, we do not see upside to 2025 revenue guidance and think the beat and raise story is likely over in the near-term,” the Bank of America analysts wrote in a note Tuesday.

Citi analysts meanwhile said they think Hims & Hers’ revenue guidance is “aspirational,” as it would require “significant acceleration” in the use of its other weight loss products. They said they are less confident about the success of these offerings.

Even so, the analysts increased their price target on the stock to $27 from $25.

“We await a more compelling entry point and more details on growth ex-GLP-1s before we become more constructive,” they wrote in a Monday note.

— CNBC’s Michael Bloom contributed to this report.

A version of this article first appeared in CNBC’s Healthy Returns newsletter, which brings the latest health-care news straight to your inbox. Subscribe here to receive future editions.

It’s been less than two weeks since Robert F. Kennedy Jr., a prominent vaccine skeptic, was confirmed to lead the Department of Health and Human Services. 

But he’s already making moves that could affect immunization uptake and policy in the U.S. HHS did not immediately respond to a request for comment on those efforts. 

That’s not much of a surprise. Kennedy has long made misleading and false statements about the safety of shots. He has claimed they are linked to autism despite decades of studies that debunk that association. 

Kennedy is also the founder of the nonprofit Children’s Health Defense, the most well-funded anti-vaccine organization in the U.S. In a government ethics agreement in January, he said he stopped serving as chairman or chief legal counsel for the organization as of December.

Kennedy tried to distance himself from those views during his Senate confirmation hearings, claiming that he isn’t “anti-vaccine” and would do nothing to make it “difficult or discourage people from taking” shots for measles and polio. 

Sen. Bill Cassidy from Louisiana, who was considered one of the biggest Republican swing votes, eventually backed Kennedy’s nomination after receiving assurances that the Trump administration would not dismantle the nation’s vaccine safety systems or alter government recommendations for immunizations.

But his track record so far suggests otherwise. 

Here’s what has reportedly happened with vaccines under Kennedy so far: 

• Childhood vaccination schedule review – In his first speech to staff, Kennedy said last week that he will review the childhood vaccine schedule despite earlier pledges not to do so. He promised that a new “Make America Healthy Again” commission would investigate vaccines, pesticides and antidepressants to see if they have contributed to a rise of chronic illness in the U.S. Trump formed that commission last week in an executive order. Though Kennedy did not directly call for changes to the vaccination schedule, he made it clear that the committee will investigate issues, including childhood vaccinations, that “were formerly taboo or insufficiently scrutinized.”

• CDC vaccine promotional campaign halted – The CDC was ordered to shelve some promotions it created for a variety of vaccines, including a campaign touting seasonal flu shots, according to multiple outlets. HHS’ assistant secretary for public affairs informed the CDC that Kennedy wanted advertisements that promote the idea of “informed consent” in vaccine decision-making instead, STAT News reported last week. Informed consent refers to a process in which patients are given important information, including possible risks and benefits, about a medical procedure or treatment. It comes amid a brutal flu season in the U.S. that is still ongoing. 

• Plans to remove some CDC, FDA advisors – Kennedy is preparing to remove members of the external committees that advise the Food and Drug Administration and CDC on vaccine approvals and other key public health decisions, Politico reported last week. He reportedly plans to replace members who he perceives to have conflicts of interest, though it is unclear how many people will be outed or when. That’s part of a broader effort to limit what he has criticized as undue pharmaceutical industry influence over the government’s health agencies. Kennedy will likely target the CDC’s advisory committee on immunization practices – or ACIP – which plays a critical role in setting U.S. vaccine policy. He is also examining other outside panels, such as those that advise the FDA. 

• First CDC advisory panel meeting postponed – The first ACIP meeting since Kennedy was sworn in has been postponed to “accommodate public comment in advance of the meeting,” according to several news outlets. The panel of advisors meets three times a year to weigh the pros and cons of newly approved or updated shots. The ACIP helps the CDC make recommendations for states and insurers on what vaccines to cover, including childhood immunizations. It’s unclear if Kennedy was directly behind the delay of the meeting, which was originally scheduled for Wednesday through Friday. HHS officials did not share when it will be rescheduled. 

We’ll continue to follow the fate of the nation’s approach to vaccinations. Stay tuned for our updates. 

Feel free to send any tips, suggestions, story ideas and data to Annika at annikakim.constantino@nbcuni.com.

Oracle on Monday announced it has formally submitted its application to join a new federally-backed medical network called the Trusted Exchange Framework and Common Agreement, or TEFCA. 

The network aims to standardize the legal and technical requirements for sharing patients’ data, which is a notoriously complex process. Health-care data is siloed and protected by laws like Health Insurance Portability and Accountability Act, or HIPAA, so exchanging this information on a large scale is no easy task. 

TEFCA was launched in late 2023 and falls under the purview of an office in the U.S. Department of Health and Human Services. Oracle had previously announced its intention to join TEFCA in October. 

Oracle acquired the medical records giant Cerner for about $28 billion in 2022, and the company has been working to revamp its technology in recent years. Joining TEFCA is a “natural next step” for Oracle, Seema Verma, executive vice president of Oracle Health and Life Sciences, told CNBC in an October interview.

“This builds on our long-standing leadership in driving interoperability to increase industry-wide efficiency and to help ensure patients retain control over their own data,” Verma said in a statement Monday. 

The main groups that participate in health-data exchanges through TEFCA are called qualified health information networks, or QHINs. These networks have to get approved and their participation is voluntary.

As of Tuesday, eight organizations, including Oracle competitor Epic Systems, have been recognized as designated QHINs for TEFCA exchange. 

If Oracle is approved to join TEFCA, it would help expand the exchange’s reach and could further bolster its credibility. Oracle’s network would support the sharing of data like X-Rays and MRIs that are not traditionally available through other exchanges, the company added. 

It’s not immediately clear if or when Oracle’s application will be approved.

Feel free to send any tips, suggestions, story ideas and data to Ashley at ashley.capoot@nbcuni.com.

Eli Lilly on Tuesday released higher doses of its weight loss drug Zepbound in single-dose vials at as much as half its usual monthly list price to reach more patients without insurance coverage for the blockbuster injection, such as those with Medicare.

It expands the company’s effort to boost the U.S. supply of Zepbound as demand soars, and to ensure eligible patients are safely accessing the real treatment instead of cheaper compounded versions. 

Eli Lilly is now offering higher doses of Zepbound in single-dose vials through a “self-pay pharmacy” section on its direct-to-consumer website, LillyDirect, which began offering lower doses of the drug in vials in August. Eligible patients diagnosed by a health-care provider with obesity alone or along with obstructive sleep apnea — Zepbound’s newly approved use — can pay for those vials themselves on the site. 

The company is selling 7.5 milligram and 10 milligram vials of Zepbound for $499 per month when patients fill their first prescription, and any time they refill within 45 days of their previous delivery. Otherwise, those two doses will cost $599 and $699, respectively. 

Also on Tuesday, Eli Lilly said it is lowering the price of both of the lower-dose vials of Zepbound by $50. The 2.5 milligram vial will now cost $349, and the 5 milligram vial will now be priced at $499, according to a release. 

Patients must use a syringe and needle to draw up the medicine from a single-dose vial and inject themselves. That differs from single-dose autoinjector pens, the currently available form of all Zepbound doses, which patients can directly inject under their skin with the click of a button.

Eli Lilly has said those vials will make more of the medication available because they are easier to manufacture than autoinjector pens, which cost roughly $1,000 per month before insurance. 

Patients typically start treatment with a 2.5 milligram dose for four weeks, then gradually increase the amount per week and later take so-called maintenance doses to keep the weight off. Eli Lilly does not currently offer the highest doses of Zepbound — 12.5 milligrams and 15 milligrams — in single-dose vials. 

The lower price points for each of the single-dose vials will benefit patients who are willing to pay for Zepbound themselves and are enrolled in Medicare or employer-sponsored health plans that do not cover obesity treatments. 

“We are, in the absence of full coverage for people suffering from obesity like other chronic diseases, we are just trying to fill that room and provide a more affordable solution, particularly for the Medicare population because none of our affordability solutions can be applied to them,” said Patrik Jonsson, president of Eli Lilly diabetes and obesity, in an interview.

Medicare beneficiaries are also not eligible for Eli Lilly’s savings card programs for Zepbound. Jonsson said “in an ideal world,” the Trump administration will enact a proposed rule from the Biden administration to have Medicare cover obesity medications. Secretary of the U.S. Department of Health and Human Services Robert F. Kennedy Jr. has been skeptical of weight loss drugs.

Some people turned to compounding pharmacies that make even cheaper copies of Zepbound because the branded treatment has been too costly and was in shortage until recent months. The U.S. Food and Drug Administration has since declared the Zepbound shortage over, however, which will soon bar many compounding pharmacies from making those versions of the drug. 

Jonsson said Eli Lilly is “not price competing with the compounders,” adding that the company does not believe “there is still a market for the mass compounding anymore.”

He said Tuesday’s announcement helps to ensure that patients “don’t rely on knockoffs that are not approved by the FDA for safety, efficacy and quality.” 

Eli Lilly declined to say how many patients are ordering vials from LillyDirect so far, but Jonsson said “the uptake has been really good.”

He said Zepbound prescriptions filled through LillyDirect’s self-pay pharmacy, which offers the single-dose vials, likely account for a low- to mid-single-digit percentage of the broader obesity market. 

Around 10% of new patients in the obesity market who start a treatment are using Zepbound through LillyDirect’s self-pay pharmacy, Jonsson added. He said launching vials of the 7.5 milligram and 10 milligram doses will add to that number. 

LillyDirect, which launched in January 2024, connects people with an independent telehealth company that can prescribe certain drugs if the patients are eligible. The site also offers a home-delivery option if the prescribed treatment is Eli Lilly’s, tapping a third-party online pharmacy to fill prescriptions and send them directly to patients. 

In December, direct-to-consumer health-care startup Ro said its platform will also offer single-dose vials of Zepbound through a new partnership with Eli Lilly.

Hims & Hers Health shares plunged 18% in extended trading on Monday after investors looked past better-than-expected revenue and earnings and focused instead on the disappointing gross margin.

Here’s how the company did, compared to analysts’ consensus estimates from LSEG:

• Earnings per share: 11 cents vs. 10 cents expected
• Revenue: $481 million vs. $470 million expected

Revenue at the telehealth company increased 95% in the fourth quarter from $246.6 million during the same period last year, according to a release.

However, the company’s gross margin, or the profit left after accounting for the cost of goods sold, was 77%, while analysts polled by StreetAccount were expecting 78.4%.

It is the second big stock drop for Hims & Hers in a matter of days. The shares tumbled 26% on Friday after the U.S. Food and Drug Administration announced that the shortage of semaglutide injection products has been resolved.

In May, Hims & Hers started prescribing compounded semaglutide, the active ingredient in Novo Nordisk‘s blockbuster GLP-1 medications Ozempic and Wegovy. The company was a breakout star within the digital health sector in 2024, in part because of the success of its popular new weight loss offering.

The company said its GLP-1 offering generated more than $225 million in revenue in 2024. The stock climbed about 200% for the year.

Compounded drugs are custom-made alternatives to brand-name drugs designed to meet a specific patient’s needs, and compounders are allowed to produce them when brand-name treatments are in shortage. The FDA said Friday that it will start taking action against compounders for violations in the next 60 to 90 days.

Hims & Hers said on the earnings call that as a result, compounded semaglutide will likely not be offered on the platform after the first quarter.

“We will have to start notifying customers in the coming month or two that they will need to start looking for alternative options on the commercial dosing,” Hims & Hers CEO Andrew Dudum said on the call. “I would suspect, just being very direct, that a lot of those patients will try to go into the open market and try to secure a branded option in some form factor.”

Some patients might still be able to access compounded semaglutide if it is clinically necessary, the company added.

The company’s weight loss offerings will primarily be composed of its oral medications and the generic medication liraglutide, which it plans to introduce on its platform this year. Excluding contributions from compounded semaglutide, Hims & Hers said it expects it weight loss offering will generate at least $725 million in revenue in 2025.

Hims & Hers also offers treatments for skin care, mental health, sexual health and hair care.

Revenue for non-GLP-1 products increased 43% to $1.2 billion for the full year, “meeting our previous 2025 revenue target a year early,” Chief Financial Officer Yemi Okupe said in a release.

“The success we are experiencing is a direct reflection of our improving ability to democratize access to high quality, personalized care across each of our specialties,” Okupe said.

Net income climbed to $26.01 million, or 11 cents per share, from $1.25 million, or 1 cent per share, a year prior. The company reported adjusted earnings of $54.1 million, meeting analysts’ estimates, according to StreetAccount.

For the first quarter, Hims & Hers expects to report revenue of $520 million to $540 million, while analysts were expecting $497 million. Adjusted earnings will be between $55 million and $65 million for the period, the company said.  

Hims & Hers will host its quarterly call with investors at 5:00 p.m. ET.

— CNBC’s Brandon Gomez contributed to this report.