WEBVTT - Hims Wants to Keep Mailing You Copycat GLP-1s. It’s Getting Trickier. 0:00:02.800 --> 0:00:10.879 Bloomberg Audio Studios, podcasts, radio news, ed is personal, and 0:00:11.000 --> 0:00:14.840 now so is treating it, introducing hard Min's Winter green 0:00:14.880 --> 0:00:18.319 flavored prescription Jewlbles, available in a variety of doses using 0:00:18.360 --> 0:00:19.680 doctor trusted ingredients. 0:00:19.880 --> 0:00:23.560 The telehealth company Hymns has been around since twenty seventeen. 0:00:24.520 --> 0:00:26.960 It burst onto the scene as a direct to consumer 0:00:27.040 --> 0:00:30.240 disruptor with the goal of making it easy to get 0:00:30.280 --> 0:00:32.640 medications in the mail if prescribed. 0:00:32.920 --> 0:00:36.960 Hard Mints are uniquely formulated and shipped directly. 0:00:37.280 --> 0:00:39.360 Instead of having to go to a pharmacy to pick 0:00:39.479 --> 0:00:43.280 up name brand drugs like Viagra or Rogain, with Hymns, 0:00:43.400 --> 0:00:46.839 you can get screened for compounded versions online and have 0:00:46.920 --> 0:00:48.720 them delivered to your door discreetly. 0:00:49.000 --> 0:00:52.440 When it first started, it was sort of millennial aged 0:00:52.479 --> 0:00:55.960 guys who were too embarrassed to go to their doctors 0:00:56.040 --> 0:00:59.320 to ask for hair loss treatments or ed treatments. 0:00:59.480 --> 0:01:02.560 That's Muller who covers healthcare for Bloomberg News. 0:01:02.520 --> 0:01:06.840 And they've sort of evolved from there into a suite 0:01:06.840 --> 0:01:10.319 of other medications for kind of like in some ways 0:01:10.440 --> 0:01:14.200 chasing the next big thing or what's big at the moment. 0:01:14.200 --> 0:01:17.360 And one of those next big things was weight loss shots. 0:01:17.800 --> 0:01:21.520 When drugs like ozempeic and wagov and Zebound and Manjaro 0:01:21.600 --> 0:01:23.679 were in shortage over the last couple of years, that 0:01:23.800 --> 0:01:29.520 allowed pharmacies to step in to make copycat versions of them. 0:01:29.880 --> 0:01:32.639 When name brand drugs are in short supply in the US, 0:01:32.800 --> 0:01:35.679 the Food and Drug Administration allows some pharmacies to make 0:01:35.720 --> 0:01:38.959 what are called compounded versions to fill the gap. That's 0:01:39.000 --> 0:01:41.480 what happened in late twenty twenty two when we go 0:01:41.600 --> 0:01:44.720 Vi first went into shortage, and in May of last year, 0:01:44.920 --> 0:01:48.200 Kim's announced its copycat version of the shots. The company 0:01:48.280 --> 0:01:52.120 saw it stocked spike by almost forty percent, But less 0:01:52.120 --> 0:01:54.720 than a year later, in February of twenty twenty five, 0:01:55.120 --> 0:01:58.680 the FDA announced that shortage was over, which raises the 0:01:58.760 --> 0:02:02.040 question what will happened if Hitts' big bet on weight 0:02:02.120 --> 0:02:04.080 loss shots doesn't pan out. 0:02:04.240 --> 0:02:07.040 They were really going all in on weight loss drugs, 0:02:07.080 --> 0:02:09.160 and it seemed like it sort of caught them by 0:02:09.240 --> 0:02:11.160 surprise the end of the shortage. I mean, they'd just 0:02:11.240 --> 0:02:14.200 run this massive Super Bowl campaign earlier that month. 0:02:14.639 --> 0:02:16.040 They were just. 0:02:16.040 --> 0:02:18.840 Really becoming more and more confident, and then the shortage 0:02:18.919 --> 0:02:22.160 ended and everyone was like What's next. 0:02:26.000 --> 0:02:27.880 I'm David Gera, and this is the big take from 0:02:27.880 --> 0:02:31.359 Bloomberg News Today on the show, how Hymns became the 0:02:31.480 --> 0:02:34.800 king of knockoff weight loss drugs and what's next for 0:02:34.840 --> 0:02:37.160 the company if it can't hold on to the crown. 0:02:42.480 --> 0:02:46.760 Bloomberg's Madison Muller started paying closer attention to him's last spring, 0:02:47.200 --> 0:02:50.200 when the company started selling its own copycat versions of 0:02:50.320 --> 0:02:53.640 sought after weight loss shots. She interviewed the CEO of 0:02:53.639 --> 0:02:56.440 the company, Andrew Doodam, shortly after it entered the market 0:02:56.440 --> 0:02:58.320 for GLP one drugs. 0:02:58.000 --> 0:02:59.960 And so that was May twenty twenty four. 0:03:00.440 --> 0:03:03.959 I went and met the CEO at a hotel here 0:03:04.000 --> 0:03:07.239 in New York, and he talked about how the company 0:03:07.280 --> 0:03:10.080 had plans and big ambitions to get into this big 0:03:10.160 --> 0:03:11.200 GLP one market. 0:03:11.360 --> 0:03:13.960 And one thing Madison wanted to ask Andrew was what 0:03:14.160 --> 0:03:15.600 had taken him so long? 0:03:16.000 --> 0:03:17.919 Honestly, when I sat down with the CEO, I was like, 0:03:17.960 --> 0:03:19.840 why didn't you do this sooner? By the time that 0:03:19.880 --> 0:03:22.079 they got into this market in May twenty twenty four, 0:03:22.360 --> 0:03:24.600 there were lots of other telehealth companies that were already 0:03:24.639 --> 0:03:27.119 doing this, and like for them, it made sense it's 0:03:27.120 --> 0:03:30.040 like sell a popular drug at a discount. That's what 0:03:30.120 --> 0:03:33.000 they were known for, and he said that they had 0:03:33.040 --> 0:03:35.720 been sort of watching the evolution of this market evolved, 0:03:35.760 --> 0:03:37.720 and they wanted to make sure that they had enough 0:03:38.240 --> 0:03:41.120 supply secured because they were just expecting these things to 0:03:41.160 --> 0:03:43.680 immediately be extremely popular. 0:03:44.000 --> 0:03:47.520 Companies like Novo Nordisk, which manufactures ozepic and we go Vi, 0:03:47.880 --> 0:03:50.720 and Eli Lilly, which makes Munjaro and zep Bound, have 0:03:50.800 --> 0:03:53.640 been struggling to keep up with the demand for their drugs, 0:03:54.080 --> 0:03:56.920 and patients trying to get them through their doctors faced 0:03:56.960 --> 0:04:00.839 long wait times and high costs, sometimes as or more 0:04:00.840 --> 0:04:04.960 a month for shots. When Hymns announced its compounded version, 0:04:05.160 --> 0:04:07.880 it priced it at one hundred ninety nine dollars a month, 0:04:08.400 --> 0:04:10.960 and the companies pitch to consumers that you could access 0:04:11.000 --> 0:04:14.000 their version simply through filling out their clinical intake form 0:04:14.040 --> 0:04:17.400 online and consulting with a doctor seemed to be paying off. 0:04:18.000 --> 0:04:21.080 The company doesn't disclose its GLP one sales, but Morgan 0:04:21.160 --> 0:04:23.839 Stanley says that in the fourth quarter of twenty twenty four, 0:04:24.279 --> 0:04:27.320 the drugs made up thirty percent of Hymns's four hundred 0:04:27.400 --> 0:04:30.960 eighty one million dollars in revenue. HIMS and other telehealth 0:04:30.960 --> 0:04:34.479 companies have relied on what are known as compounding pharmacies 0:04:34.520 --> 0:04:38.360 to make copies of popular drugs based on a doctor's recommendation. 0:04:38.600 --> 0:04:42.760 These pharmacies can also tailor dosages or ingredients for individual 0:04:42.800 --> 0:04:46.080 patients who aren't able to use a commercially available product. 0:04:46.640 --> 0:04:49.240 But what set Hymns apart from its rivals is that 0:04:49.279 --> 0:04:52.080 when the company announced it would start offering GLP ones, 0:04:52.440 --> 0:04:55.000 it had a leg up. It already owned two of 0:04:55.040 --> 0:04:59.800 its own compounding pharmacies. Madison went to c one in Ohio. 0:05:00.000 --> 0:05:02.960 Ciant warehouse with a bunch of pharmacists and different people 0:05:03.279 --> 0:05:06.960 doing fulfillment making some of the compounded drugs like their 0:05:07.000 --> 0:05:09.440 gummies in like pasmat suits in. 0:05:09.400 --> 0:05:10.480 The back area. 0:05:10.600 --> 0:05:14.359 Madison says owning these compounding pharmacies is key to him's 0:05:14.520 --> 0:05:18.080 ability to sell compounded medications at a deep discount. 0:05:18.520 --> 0:05:21.960 So the drug makers Nova Noordisk and Eli Lilly obviously 0:05:22.040 --> 0:05:26.040 set their list prices for the medications, which they argue 0:05:26.360 --> 0:05:28.919 takes into account all of the R and D, the 0:05:29.000 --> 0:05:32.880 money that's spent going into developing these drugs, which for 0:05:32.920 --> 0:05:35.080 both companies, you know they've been sort of several decades 0:05:35.120 --> 0:05:38.240 in the making. They also have these very sophisticated injector 0:05:38.279 --> 0:05:41.800 pens that are patented that patients use to inject the medications, 0:05:42.040 --> 0:05:46.000 whereas compounding pharmacies mix the drugs up themselves from active 0:05:46.160 --> 0:05:50.280 ingredients and they don't have those sophisticated injector pens. That 0:05:50.440 --> 0:05:53.520 drugs HYMN sells are a vile with a syringe that 0:05:53.560 --> 0:05:58.040 you drop and inject yourself. They aren't approved by the FDA, 0:05:58.160 --> 0:06:01.800 they don't need to be tested for safety and efficacy 0:06:01.839 --> 0:06:04.240 in the same way, and so they're able to price 0:06:04.279 --> 0:06:05.040 them a lot cheaper. 0:06:05.720 --> 0:06:08.279 In February of this year, HYMS aired an ad during 0:06:08.320 --> 0:06:11.680 the Super Bowl and prepared for sales to keep rising. 0:06:12.000 --> 0:06:14.640 This system wasn't built to help us. It was built 0:06:14.640 --> 0:06:18.279 to keep us sick and stuck, but not anymore. 0:06:19.279 --> 0:06:23.159 HIMS and Hers offers life changing weight loss medications. But then, 0:06:23.640 --> 0:06:26.280 just a week after it aired, the FDA announced that 0:06:26.360 --> 0:06:31.080 GLP one shortage was over. So how did that affect 0:06:31.120 --> 0:06:33.680 Hymns's strategy and what could it mean for its future. 0:06:34.080 --> 0:06:44.559 We'll get into that after the break. In February twenty 0:06:44.560 --> 0:06:47.960 twenty five, the FDA announced that the GLP one shortage 0:06:48.160 --> 0:06:51.800 was over. That meant compounding pharmacies were no longer allowed 0:06:51.839 --> 0:06:55.159 to make exact copies of wildly popular weight loss drugs. 0:06:55.680 --> 0:06:59.200 Bloomberg's Madison Muller says that meant Hymns had to refine 0:06:59.200 --> 0:06:59.880 its strategy. 0:07:00.200 --> 0:07:04.320 Investors were questioning whether there was an opportunity for them 0:07:04.360 --> 0:07:06.760 going forward, and Hyms was just sort of maintaining that 0:07:06.800 --> 0:07:09.159 there was, and you know, investors would kind of have 0:07:09.200 --> 0:07:10.960 to trust them and they would be able. 0:07:10.800 --> 0:07:11.120 To do it. 0:07:11.480 --> 0:07:14.480 And Madison says hyms had two cards to play. The 0:07:14.520 --> 0:07:17.600 first was leaning into what's known as personalization. 0:07:18.640 --> 0:07:22.560 So the FDA allows pharmacies to personalize drugs for individual 0:07:22.600 --> 0:07:25.840 patients when their doctor says commercially available medicines won't meet 0:07:25.880 --> 0:07:27.840 their needs. So what that means is selling them at 0:07:27.880 --> 0:07:31.840 lower doses, adding other ingredients like vitamins or whatever, because 0:07:31.880 --> 0:07:34.360 that makes them different enough from the drugs that are 0:07:34.360 --> 0:07:38.000 commercially available that they're technically still allowed to sell them. 0:07:38.080 --> 0:07:40.840 So a lot of telehealth companies, including Hymns, have continued 0:07:40.880 --> 0:07:43.680 to do that after the shortages ended, and that's allowed 0:07:43.720 --> 0:07:45.520 them to continue selling the drugs. 0:07:45.720 --> 0:07:48.320 And Hyms's other play this year was to partner with 0:07:48.400 --> 0:07:52.680 other companies. In April, Hymns announced a partnership with Novo Nordisk, 0:07:52.760 --> 0:07:55.160 the maker of ozempic and we go v. Under the 0:07:55.280 --> 0:07:57.560 terms of the deal, Hymns would be able to sell 0:07:57.600 --> 0:08:00.720 we govy at a discount, and Novo Nordias would get 0:08:00.760 --> 0:08:03.320 to offer its drugs through Hymns this popular platform. 0:08:03.360 --> 0:08:06.480 That was I think a surprise to everyone when Novo 0:08:06.520 --> 0:08:11.120 Nordisk and Hymns announced that they had struck this partnership deal. 0:08:11.640 --> 0:08:15.360 Because Nova Nordisk and Eli Lilly both have been really 0:08:16.920 --> 0:08:21.840 strong in their statements about companies that sell compounded drugs. 0:08:21.880 --> 0:08:24.960 They are not supportive of it. They don't think that 0:08:25.000 --> 0:08:28.120 it should be happening, especially after the shortages are over 0:08:28.280 --> 0:08:33.200 there filing lawsuits, taking legal action against compounding pharmacies, telehealth 0:08:33.200 --> 0:08:35.640 firms that are selling these compounded drugs, and so for 0:08:35.679 --> 0:08:37.720 them to come out and then partner with one of 0:08:37.760 --> 0:08:41.800 the biggest offenders was I think a surprise to everyone, 0:08:41.880 --> 0:08:44.640 and it seemed like a very unlikely partnership from the beginning. 0:08:45.760 --> 0:08:49.720 But that unlikely partnership between Hymns and Novo Nordisk didn't 0:08:49.800 --> 0:08:50.360 last long. 0:08:50.800 --> 0:08:54.280 There were sort of signs that it had gotten off 0:08:54.440 --> 0:08:58.880 to a rocky start almost immediately, just with the different 0:08:58.880 --> 0:09:01.520 press releases the companies were sending out the ways that 0:09:01.559 --> 0:09:04.640 they were talking about this arrangement, calling it a partnership 0:09:04.760 --> 0:09:06.760 versus just sort of calling it like a deal. 0:09:07.200 --> 0:09:08.720 There were signs that things were. 0:09:08.640 --> 0:09:12.199 Not as they were made out to be, and then 0:09:12.320 --> 0:09:15.520 less than two months later, it all sort of spectacularly 0:09:15.640 --> 0:09:18.600 fell apart, very abruptly. Nov An Artists came out with 0:09:18.679 --> 0:09:21.960 an early morning press release saying that they were terminating 0:09:21.960 --> 0:09:22.640 the partnership. 0:09:22.920 --> 0:09:25.520 The Hymns CEO was on vacation with his. 0:09:25.520 --> 0:09:28.400 Family and Maui and it wasn't until hours later that 0:09:28.480 --> 0:09:29.120 they ended up. 0:09:29.360 --> 0:09:30.680 They didn't even issue a press release. 0:09:30.720 --> 0:09:32.840 He just came out on Twitter and said something and 0:09:32.880 --> 0:09:35.320 then was doing media interviews about it. So the whole 0:09:35.320 --> 0:09:39.120 thing was very dramatic and ended very abruptly. 0:09:39.840 --> 0:09:43.480 So where does that leave Hymns without that partnership, Madison says. 0:09:43.679 --> 0:09:46.800 Investors have started to question whether the company can still 0:09:46.880 --> 0:09:50.840 hit sales targets, and him's's latest earnings report it fell 0:09:50.880 --> 0:09:52.360 short of Wall Street estimates. 0:09:53.400 --> 0:09:55.760 They're not able to do what they once were, and 0:09:55.840 --> 0:09:58.800 so that continues to be a question of how is 0:09:58.840 --> 0:10:01.640 the company going to handle and what's next and do 0:10:01.679 --> 0:10:06.240 they have another product that can sort of replace the 0:10:06.320 --> 0:10:10.640 blockbuster sales potential that they had from GLP ones. 0:10:11.000 --> 0:10:14.920 At this moment. What is the company's attitude toward making 0:10:14.960 --> 0:10:17.840 these drugs? Are they confident that this effort to personalize 0:10:17.840 --> 0:10:19.160 them is going to make it so they can keep 0:10:19.240 --> 0:10:21.479 doing it without any legal backlash. 0:10:21.520 --> 0:10:24.200 They're extremely confident in that they're not alone in that 0:10:24.240 --> 0:10:26.800 there are other compounding pharmacies sort of like the trade 0:10:26.840 --> 0:10:30.240 groups for compounding pharmacies also believe that this is a 0:10:30.440 --> 0:10:33.439 valid and legal way to keep making these drugs. 0:10:33.720 --> 0:10:38.080 But Madison says the drug companies that develop these treatments disagree. 0:10:38.400 --> 0:10:41.200 Nova, Nordisks, and Eli Lilly do not think that, and 0:10:41.240 --> 0:10:43.720 that was part of the reason why Novo ended its 0:10:43.760 --> 0:10:47.040 partnership with Hymns was because they said, you know, we 0:10:47.280 --> 0:10:51.720 sort of had this maybe not official agreement, but thought 0:10:52.080 --> 0:10:55.200 or belief that they would sort of wind down their 0:10:55.200 --> 0:10:58.920 compounding operations, and they didn't. They were continuing to market 0:10:58.960 --> 0:11:01.640 them and Nova was not happy with that. And so 0:11:02.480 --> 0:11:07.320 there is this split right now between people who believe 0:11:07.360 --> 0:11:09.880 that this is perfectly legal and moral and that patients 0:11:09.880 --> 0:11:13.680 should have these alternate options to the drugs that cost 0:11:13.840 --> 0:11:16.840 less are widely available. And then you have the drug makers, 0:11:16.880 --> 0:11:18.560 and you have a lot of doctors who are like, 0:11:18.760 --> 0:11:23.640 we can't have this explosion of essentially unregulated medicines, and 0:11:23.920 --> 0:11:26.200 all of these other considerations, like there needs to be 0:11:26.200 --> 0:11:27.960 a nuanced conversation about it. 0:11:28.640 --> 0:11:32.880 Even as existential questions hang over Hymns's future. Madison says, 0:11:32.920 --> 0:11:35.520 the impact of the telehealth company and others like it 0:11:35.760 --> 0:11:38.120 have changed the market for pharmaceuticals. 0:11:38.480 --> 0:11:42.480 These telehealth companies, for all of the complaints about them, 0:11:42.559 --> 0:11:45.480 they have made these drugs more accessible and that is 0:11:45.679 --> 0:11:48.680 something you cannot deny. I mean, the drug makers themselves 0:11:48.720 --> 0:11:51.800 are literally trying to emulate what these telehealth companies have done. 0:11:51.880 --> 0:11:54.600 Lily has set up Lily Direct. Nova Noordisk now has 0:11:54.640 --> 0:11:57.480 its own direct to consumer offering, and they see that 0:11:57.559 --> 0:12:01.600 there are patients who want an easy option to get 0:12:01.600 --> 0:12:04.199 these medications and sort of trying to meet these patients 0:12:04.200 --> 0:12:08.079 where they're at, which is oftentimes online, but. 0:12:08.120 --> 0:12:11.200 They may not be meeting them fast enough. Novo Nordisk's 0:12:11.240 --> 0:12:14.440 second quarter earnings showed the smallest growth in sales since 0:12:14.480 --> 0:12:17.920 twenty twenty one. Madison says that part of that slowdown 0:12:18.080 --> 0:12:20.599 can be attributed to patients in the US turning to 0:12:20.679 --> 0:12:25.160 copycat drugs from compounding pharmacies, and Denmark based Novo Nordisk 0:12:25.440 --> 0:12:28.760 is losing ground to its US rival, Eli Lilly, whose 0:12:28.800 --> 0:12:31.360 GLP one drugs have been shown to be more powerful. 0:12:31.960 --> 0:12:36.160 But Eli Lilly's performance has also disappointed investors. The company 0:12:36.160 --> 0:12:38.600 had developed a new weight loss pill with the hopes 0:12:38.600 --> 0:12:41.760 it could reach even more customers, but study results released 0:12:41.760 --> 0:12:45.360 in early August indicated that that pill wasn't as effective 0:12:45.360 --> 0:12:47.920 as Wall Street had hoped. On the day those results 0:12:47.920 --> 0:12:51.160 were made public, Eli Lilly's share price fell by more 0:12:51.200 --> 0:12:54.559 than fourteen percent in New York, its biggest single day 0:12:54.640 --> 0:12:58.600 drop in twenty five years, and Madison says whether Hymns 0:12:58.679 --> 0:13:00.960 will remain a player in the market is a matter 0:13:01.000 --> 0:13:03.280 of intense and polarizing speculation. 0:13:04.960 --> 0:13:08.680 I've talked to analysts who say they've never seen a 0:13:08.760 --> 0:13:12.480 debate like this over a company that they covered, especially 0:13:12.520 --> 0:13:17.240 in healthcare, that there's just two very different sides. There 0:13:17.320 --> 0:13:21.120 is a split over whether this is a disruptive, genius 0:13:21.160 --> 0:13:24.600 company or whether this company is just doing something that 0:13:24.679 --> 0:13:27.640 pushes the boundaries too far, and then you do have 0:13:27.679 --> 0:13:30.120 some people in the middle who are like the weight 0:13:30.160 --> 0:13:33.400 loss debate is overshadowing everything else that this company is doing, 0:13:33.440 --> 0:13:35.680 and the fact that they have been very successful in 0:13:36.480 --> 0:13:38.719 ed and hair loss and that they are a profitable 0:13:38.760 --> 0:13:41.840 telehealth company and the biggest telehealth company and sort of 0:13:41.880 --> 0:13:43.719 like setting the stage for the rest of them. And 0:13:43.760 --> 0:13:48.160 then they've set this roadmap for the next few years 0:13:48.240 --> 0:13:50.960 what they hope to achieve. They want to expand globally. 0:13:51.120 --> 0:13:54.760 They're hiring like crazy. They're taking people from Uber and 0:13:54.800 --> 0:13:56.760 all of these other Silicon Valley companies and sort of 0:13:56.760 --> 0:13:57.559 bringing them into him. 0:13:57.640 --> 0:13:59.560 So what's going to happen there? 0:13:59.640 --> 0:14:02.480 You know, all the company be able to grow in 0:14:02.559 --> 0:14:05.959 the way that it's wanting to and sort of laying 0:14:06.000 --> 0:14:06.840 out for people. 0:14:07.559 --> 0:14:08.760 It's I mean. 0:14:08.640 --> 0:14:10.400 It's going to be an interesting story to follow, I 0:14:10.440 --> 0:14:12.880 think for the next couple of years because they've so 0:14:13.000 --> 0:14:15.679 publicly made all of these declarations of what they hope 0:14:15.679 --> 0:14:19.320 to achieve, and we can sort of use those as 0:14:19.320 --> 0:14:22.480 benchmarks to see what happens. 0:14:26.040 --> 0:14:28.520 This is the Big Take from Bloomberg News. I'm David Gura. 0:14:28.760 --> 0:14:31.600 The show is hosted by me Sarah holder wanha and 0:14:31.640 --> 0:14:36.160 Seleiah Mosen, Aaron Edwards, David Fox, Eleanor Harrison Dengate, Patty Hirsch, 0:14:36.360 --> 0:14:40.960 Rachel Lewis, Chrisky, Naomi Julia Press, Pracy Samuelson, Naomi Shaven, 0:14:41.200 --> 0:14:44.640 Alex Segura, Julia Weaver, Young Young and Tapia yes Zoa. 0:14:44.800 --> 0:14:47.000 Make the show. To get more from the Big Take 0:14:47.080 --> 0:14:50.360 and unlimited access to all of bloomberg dot com, subscribe 0:14:50.400 --> 0:14:54.720 today at Bloomberg dot com Slash Podcast offer. Thanks for listening. 0:14:54.880 --> 0:14:55.840 We'll be back on Monday.