Hims & Hers reported a surprise earning miss on Monday, as Q1 was the least profitable quarter for the company in more than five years. The company’s taken a big hit from costs associated with moving away from its own compounded weight-loss products and toward branded treatments sold by Novo Nordisk and Eli Lilly.
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- Hims originally began selling knockoff Wegovy in May 2024, when it was allowed to because the drug was in a shortage. But it continued to do so after the drug was taken off the shortage list, saying it was offering a “personalized” version of the drug that met a clinical need that Novo couldn’t with its prefilled pens.
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In January, Novo’s Wegovy pill came to market and immediately showed signs that it was expanding the GLP-1 market. Weeks later, Hims rolled out a copy of the pill. That would become the straw that broke the camel’s back: Novo sued Hims for patent infringement.
- Eventually, Novo dropped the lawsuit and Hims agreed to no longer market its own knockoff products, instead offering Novo’s branded products on its platform.
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The pivot away from knockoffs cost Hims $33 million in the first quarter, primarily consisting of “write-downs related to our compounded GLP-1 supply chain that now face risk of obsolescence,” Hims CFO Yemi Okupe told analysts. It was likely not a surprise to Hims that selling Novo’s products would have worse unit economics, but Okupe said selling branded products has the potential to bring more people onto the platform who may purchase other products as well.
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So how will Hims move forward?
The company is now looking beyond GLP-1s to fuel growth. In the past year, it launched hormone treatments and a lab product, and has expanded to international markets.
Hims has also signaled that it will sell peptides once the Food and Drug Administration lifts restrictions on them. Additionally, Hims CEO Andrew Dudum teased potentially making its own wearable device. |
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One of the hardest things about measuring inflation is that products change. According to the official Consumer Price Index data for smartphones, prices have dropped 65% since the start of 2020 in the United States. For comparison, the latest iPhone at the start of 2020 was the iPhone 11, which was yours for $699. Today, the iPhone 17 from Apple is $799 — not exactly a 65% cut.
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