Hims & Hers Health (HIMS) shares closed up more than 10% in Thursday's trading after news outlets reported that the US Federal Drug Administration needed more time to determine if it could continue to sell its version of Eli Lilly's (LLY) obesity drug.
The FDA recently removed Lilly's tirzepatide from a shortage list, which meant Hims & Hers Health could no longer sell its version of the drug.
However, the FDA is facing litigation challenging its decision. Reports, citing court documents, said the FDA has extended until Dec. 19 its date for a joint status report on supplies of the drug.
In a note Thursday, Truist said the latest development "increases the likelihood of the FDA reversing its decision," given the lobbying by Hims & Hers and other compounded drugmakers.
"However, it is also a possibility that, given the administration change, any definitive decision is again pushed out," according to the note.
Trust maintained its hold rating on the stock with a price target of $24.
Price: 23.80, Change: -0.35, Percent Change: -1.45
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