By Amina Niasse and Kunal Das
Nov 9 (Reuters) – Hims & Hers Health said on Monday it will begin offering some unapproved peptide treatments in November after US regulators eased curbs, with plans to later expand into compounded versions of BPC-157 and TB-500, popular wellness products that also lack FDA approval.
The November launch from the tele-health company will include treatments such as NAD+, sermorelin and glutathione. CEO Andrew Dudum said Hims would also manufacture BPC-157 and TB-500 in the United States.
The two peptides are often taken together for fitness and recovery in a combination popularly known as the “Wolverine stack.”
The US government has eased restrictions on compounding certain unapproved peptides, but the policy involves enforcement discretion rather than FDA approval.
Peptides, short chains of amino acids, have boomed in popularity over the past year, driven by wellness influencers promoting them for uses ranging from anti-aging to sexual health.
US Health Secretary Robert F. Kennedy Jr. has supported broader access to peptides, calling himself a “big fan” of the treatments and arguing that restrictions were driving Americans to potentially unsafe products from overseas.
Critics have said the new policy could expose patients to risks such as contamination, impurities and unknown side effects, and argued that peptide substances should undergo the standard FDA drug approval process before being manufactured and prescribed.
CFO Yemi Okupe said revenue from the treatments is expected to be immaterial through the year.
BRANDED SHIFT HURTS MARGINS
Hims also cut its full-year core profit forecast on Monday as higher costs tied to a pivot to branded weight-loss drugs and international expansion pressured margins.
Hims & Hers shares were down more than 3% in volatile after-hours trading.
The company’s subscriber base grew 13% from a year earlier to nearly 2.8 million, while monthly revenue per average subscriber jumped 30% to $105.
CFO Okupe said in an interview with Reuters that menopause therapies and testosterone testing helped drive the increase in revenue per subscriber.
Gross margin fell sharply to 57% from 74% a year earlier as Hims shifted toward costlier branded weight-loss drugs and expanded internationally.
“Margin compression was to be expected,” said Paul Cerro, chief investment officer at Cedar Grove Capital Management, which owns Hims shares.
“This is all part of growing their condition categories and attracting more subscribers.”
Hims recently struck a deal to offer Eli Lilly’s obesity drugs, adding to its existing partnership with Novo Nordisk. Okupe said the Lilly partnership should help improve customer retention.
Keonhee Kim, an analyst at Morningstar, said the greater mix of branded weight-loss products was helping lift revenue per subscriber but would continue to weigh on gross margins in the near term.
INTERNATIONAL OFFSETS US SLOWDOWN
International expansion was another major source of growth, with revenue outside the United States more than quadrupling to $233.3 million.
US revenue rose 21% to $657.1 million. Hims narrowed its full-year revenue forecast to $3.13 billion to $3.15 billion from $3.1 billion to $3.3 billion previously.
Kim said slower growth in Hims’ US business likely drove the revenue shortfall, outweighing strong gains from the company’s international expansion.
Third-quarter revenue rose 49% to $890.4 million, slightly below analysts’ average estimate of $892.9 million, according to LSEG-compiled data.
The company posted a quarterly net loss of $33 million, compared with net income of $15.8 million a year earlier.
(Reporting by Kunal Das in Bengaluru and Amina Niasse in New York; Editing by Sahal Muhammed and Sherry Jacob-Phillips)
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