Shares of Hims & Hers Health(NYSE: HIMS) and LifeMD (NASDAQ: LFMD) are surging on Tuesday. The companie' stocks had jumped 24% and 34%, respectively, as of 3:15 p.m. ET as the S&P 500 and the Nasdaq Composite showed modest gains.

Shares soared after pharma giant Novo Nordisk announced it will distribute its blockbuster GLP-1 weight loss drug Wegovy through telehealth platforms like Hims & Hers and LifeMD.

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Wegovy is popular

Novo Nordisk announced it will sell Wegovy directly through telehealth providers including Hims & Hers Health, LifeMD, and Ro, making it easier for patients to access the uber-popular anti-obesity drug. The drugmaker resolved an earlier supply shortage and is now pushing to expand its reach. Customers will be able to access Novo's direct to consumer pharmacy, NovoCare, through Hims & Hers, LifeMD, and peers.

All dose sizes of Wegovy will be available through Hims & Hers starting at $599 per month. Hims & Hers says this also includes 24/7 care, nutritional guidance and ongoing clinical support. LifeMD announced that Wegovy "enhances LifeMD’s ability to support patients with a brand-name GLP-1 option at a recently reduced self-pay cost of $499 per month, including convenient home delivery."

The investor's view

Hims & Hers saw its sales skyrocket after a supply shortage of GLP-1 drugs like Wegovy temporarily allowed the telehealth provider to sell compounded versions -- essentially generic versions of the drug made by a third party. When the shortage ended, Hims & Hers lost its ability to sell the lucrative drugs. The new partnership revives a key driver of revenue for Hims & Hers and should help boost its top and bottom lines.

LifeMD stock's track has been less dramatic and it's actually down over the past year.

Although its rivals gain access to Wegovy as well, Hims & Hers is the most popular of the telehealth providers and is likely to benefit most with its brand recognition and existing customer base. That being said, its stock trades at a steep 53.7 times earnings and 4.6 times sales. It is too expensive at this point for my taste. Shares of LifeMD, on the other hand, trade at just 1.2 times earnings. Though the company is still operating at a loss, it's moving rapidly in the right direction and could offer an alternative to the pricey Hims & Hers stock.

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.

Why Hims & Hers Health and LifeMD Are Skyrocketing Today was originally published by The Motley Fool

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