Will the FDA publish final rules or take formal enforcement action restricting 503A compounding of semaglutide by June 30, 2026?

The resolution criteria require final rules OR formal enforcement action. Final rulemaking is nearly impossible by June 30 given the 6-12 month Federal Register notice-and-comment requirement — call it 5% probability. Enforcement action (warning letters with cease-and-desist, injunctions) is the realistic path. FDA rhetoric on Feb 6 ('decisive steps') is aggressive but 17 days have passed with no formal action. Four months remain until June 30 — ample time for enforcement. The critical counterweight is management self-adaptation: the $65M Q1 headwind from 'weight loss cadence changes' and the $226M CapEx in compounding infrastructure together suggest management believes (a) compounding authorization continues and (b) they can operationally adjust without waiting for FDA action. If the company is already transitioning, FDA urgency for targeted enforcement at HIMS specifically diminishes. However, FDA rhetoric suggests broader industry action, not just HIMS-specific enforcement. Combined OR probability: 60%.

Decomposing the question: P(final rules by June 30) + P(enforcement action by June 30) - P(both). Final rules: ~5% — the notice-and-comment rulemaking process takes a minimum of 6-9 months after the rule is proposed; an initiation now would resolve in late 2026 at earliest. Enforcement action: ~52%. FDA has been rhetorically aggressive since Feb 6, the oral semaglutide episode showed willingness to coordinate with DOJ for rapid response, and the agency has 4+ months remaining. However, the Sep 2025 warning letter was about 'false or misleading claims,' not compounding itself — FDA may prefer the rulemaking path for industry-wide effect even if slower. The company's diversification (Labs, testosterone, menopause, $226M CapEx investment) signals management's belief that compounding authorization survives the horizon, which itself is a weak signal about industry expectations. Total: ~55%.

The 70%+ personalized revenue disclosure in the 10-K is an important data point but cuts two ways. On one hand, it confirms FDA's concern is warranted — compounding is not peripheral but central to the HIMS business model. On the other hand, widespread industry dependence on 503A compounding may make FDA more cautious about industry-wide enforcement action that would disrupt supply chains for patients who depend on these medications. The distinction between 'final rules' and 'enforcement action' is critical: warning letters with cease-and-desist orders have been issued against compounders before in similar contexts (e.g., HCG compounding 2020, peptide compounders 2019) and can resolve within weeks. FDA's Feb 6 announcement of 'decisive steps' with no follow-through in 17 days may indicate deliberate process (coordinating with DOJ, building legal record) rather than hesitancy. The administration's emphasis on deregulation creates modest counterweight. Net assessment: 62% YES.

The FDA announced 'decisive steps' on Feb 6 but has not followed through in 17 days. The resolution question accepts enforcement action (warning letter with C&D, injunction) — not just final rules. Rulemaking by June 30 is essentially impossible given required notice-and-comment timelines. Enforcement action is plausible but the company's self-adaptation reduces urgency. Management's $226M CapEx commitment in compounding infrastructure suggests they believe enforcement is not imminent. The previous prediction of 65% was set before the Q4 earnings, which revealed both the 70%+ personalized revenue (slightly alarming for FDA) and the $65M self-imposed headwind (slightly reassuring that market forces are already correcting). Slight downward revision from 65% to 58% is warranted.

FDA enforcement action against semaglutide compounders is the core scenario — not formal rulemaking which is off the table. The Feb 6 'decisive steps' language combined with the oral semaglutide episode (where FDA coordinated rapidly with DOJ) suggests enforcement infrastructure is being built. Key bullish factors: FDA has clear legal authority under 503A shortage provisions, the shortage designation has been contested, and the agency has publicly committed to action. Key bearish factors: (1) the administration's deregulatory stance may dampen enforcement appetite, (2) industry-wide enforcement is complex and FDA may prefer waiting for rulemaking to achieve cleaner legal footing, (3) company is already adapting. Weighting these: 63% YES.

The key question is whether FDA's 'decisive steps' rhetoric translates to formal enforcement action within 4 months. Historical base rate: FDA enforcement actions against compounders have often taken 6-18 months from initial announcement to formal warning letters or injunctions. The agency's preference for rulemaking (which provides cleaner legal authority) means the June 30 deadline is challenging even for enforcement action. The 70%+ personalized revenue disclosure does not change FDA's legal calculus — the question is whether semaglutide is properly on the shortage list, which is a separate determination. Company adaptation ($65M headwind, new category launches) suggests market pressure may do what the FDA would need enforcement to accomplish. Slight downward adjustment from prior 65% to 57%.

FDA rulemaking: impossible by June 30. Enforcement action: plausible. FDA announced decisive steps Feb 6, no action in 17 days. Four months remain. Company is self-adapting which reduces urgency. $226M CapEx signals management confidence in continued compounding. Prior prediction was 65%. New data slightly bearish on enforcement urgency. Estimate: 60% YES.

FDA final rules by June 30: ~5%. Formal enforcement action by June 30: ~52%. Combined OR: ~55%. FDA has been aggressive in rhetoric but slow in formal action. The 17-day gap since 'decisive steps' without follow-through is concerning. Company is adapting. The administration's deregulatory posture creates headwinds for enforcement. Slight downward revision from 65%.

Base case: FDA enforcement action (warning letter with C&D or injunction) before June 30. FDA has the authority, has signaled intent, and has demonstrated capacity for rapid action (oral semaglutide episode). Four months is enough time. The company's 70%+ compounding revenue dependence actually increases FDA motivation — the scale of the market suggests systemic risk that demands regulatory response. Partially offset by company self-adaptation. Estimate: 62% YES.