Shares of Hims & Hers Health rose more than 7% on Thursday after analysts said the U.S. drug regulator’s consideration of allowing compounding pharmacies to manufacture popular peptides could benefit the company over the long term.
The Food and Drug Administration said on Wednesday it plans to convene a panel of external experts to review the possible easing of restrictions on 12 peptides, which are widely used for purposes ranging from tanning and longevity to obesity treatment and wound healing.
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Peptides, which are short chains of amino acids that serve as building blocks of proteins and carry out essential biological functions in the body, have become increasingly popular among fitness enthusiasts, partly driven by the success of peptide-based GLP-1 weight-loss drugs. They have also been promoted by several public figures, including Health Secretary Robert F. Kennedy Jr.
However, safety concerns persist. Most peptides have not been thoroughly tested in humans and may pose potential health risks. In 2023, the FDA restricted compounding pharmacies from producing 14 peptides, citing concerns over immunogenicity, toxicity, and impurities.
Hims & Hers Health briefly sold lower-cost “copycat” versions of Novo Nordisk’s GLP-1 injectable drugs when the branded medicines were in short supply, but later stopped following legal disputes with Novo Nordisk and warnings from the Food and Drug Administration.
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.
