By Sneha S K
April 16 (Reuters) – Shares of Hims & Hers Health rose more than 7% on Thursday as analysts said the U.S. drug regulator’s consideration to allow compounding pharmacies to manufacture popular peptides could benefit the telehealth firm in the long run.
The Food and Drug Administration on Wednesday said it planned to convene a panel of outside experts to review easing of restrictions for 12 peptides, popularly used for everything from tanning to longevity, and obesity to wound healing.
Peptides, short chains of amino acids that act as building blocks of proteins and perform essential biological functions in the body, have become increasingly popular among fitness enthusiasts, driven partly by the success of peptide-based GLP-1 weight-loss drugs. They have also been championed by several public figures including Health Secretary Robert F. Kennedy Jr.
Still, safety concerns remain. Most peptides have not been adequately tested in humans and could pose health risks. In 2023, the FDA barred compounding pharmacies from manufacturing 14 peptides citing risks related to immunogenicity, toxicity and impurity.
The new guidance, however, could benefit Hims, analysts said.
Hims briefly offered cheaper, “copycat” versions of Novo Nordisk’s GLP-1 injectable drugs while the branded medicines were in short supply, but had to stop due to legal tussles with Novo and warnings from the FDA.
The FDA’s potential shift “seems like a clear positive for Hims and would help fill the growth hole that is likely emerging from the transition to commercial weight-loss products,” said Leerink Partners analyst Michael Cherny.
Last year, Hims acquired a peptide facility based in California to strengthen its domestic supply chain. A positive recommendation and FDA alignment would allow the company to leverage its existing peptide facility, Cherny said.
Hims’ chief medical officer Pat Carroll said the company is actively exploring ways to expand access to peptides while remaining aligned with FDA guidance and commitment to consumer safety.
The news creates optionality around new potential revenue streams and can help the company repurpose GLP-1 capacity toward other peptides, said BofA analyst Allen Lutz.
“This would not immediately translate into revenue but would seemingly be a growth avenue that HIMS would push hard on,” Cherny said, adding that it could be an important potential catalyst as the personalized GLP-1 compounding opportunity dissipates.
(Reporting by Sneha S K in Bengaluru; Editing by Diti Pujara)
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