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About five years ago, special purpose acquisition companies (SPACs) were all angry in the US. The startup was made public by merging with these listed cash shells a few years away from profitability. Today, 92% of them are trading below launch prices, according to Data Company ListingTrack.
One company that was able to avoid this fate is Hims & Hers Health. The consumer digital health platform began selling erectile dysfunction and hair loss drugs and merged with SPAC, backed by Oaktree Capital Management in 2021. The stock price is typical. In contrast, Consumer Brand Playboy, which announced its merger with SPAC on the same day, lost almost 90% of its value.
Why is Hims outperforming? A weight loss drug also known as GLP-1. The company began selling a combined version of semaglutide, the active ingredient in diabetes treatment, a no-disk blockbuster weight loss injection and semaglutide, the active ingredient in diabetes treatment, which was jumping into the substitution of Nove and Elily’s rich Vallee stocks and a wealth of Vallee stocks.
Compared to Novo’s Wegovy’s listing price over $1,300, demand for HIMS’ imitation injection, sold for $199 a month, was nearly $1.5 billion, a 69% increase in revenue last year, driving the company’s first annual profit.
The flaw in this model is that combined drugs are made with the same basic ingredients as branded drugs, but made by specialized pharmacies rather than pharmaceutical companies, are only permitted by regulators during shortages. And in February, the Food and Drug Administration declared that the shortages in Wegovy and Ozempic had been resolved. Hims stock has collapsed.
Like the hairline of male clients, Hims’ business is emerging. Attacking its partnership with NOVO, selling Wegovy on the platform, repeating forecasts for the group’s total revenues, increasing from 63% to $2.3 billion this year. The company also introduced a 2030 target of revenue of at least $6.5 billion, meaning an average annual growth of around 22% each year between 2026 and 2030.
To get there, HIMS needs to be more than just another distributor of Wegovy. Rivals Telehealth Platforms Ro and Lifemd are trading with Novo to sell drugs. Customers who have become accustomed to paying less than $200 for a combined GLP-1 may not be able to leap the offer of a price brand name.
HIMS can generate more revenue for new subscribers with cross-seller services such as Skincare. The company has already shown that it can pivot smartly, and according to data from ListingTrack, it has become the fourth-best performer of the SPAC boom. HIMS customers may be improving with age. Most of their contemporaries can make such claims.
pan.yuk@ft.com
