Speaker 1: Bloomberg Audio Studios, podcasts, radio news, ed is personal, and
Speaker 1: now so is treating it, introducing hard Min's Winter green
Speaker 1: flavored prescription Jewlbles, available in a variety of doses using
Speaker 1: doctor trusted ingredients.
Speaker 2: The telehealth company Hymns has been around since twenty seventeen.
Speaker 2: It burst onto the scene as a direct to consumer
Speaker 2: disruptor with the goal of making it easy to get
Speaker 2: medications in the mail if prescribed.
Speaker 1: Hard Mints are uniquely formulated and shipped directly.
Speaker 2: Instead of having to go to a pharmacy to pick
Speaker 2: up name brand drugs like Viagra or Rogain, with Hymns,
Speaker 2: you can get screened for compounded versions online and have
Speaker 2: them delivered to your door discreetly.
Speaker 3: When it first started, it was sort of millennial aged
Speaker 3: guys who were too embarrassed to go to their doctors
Speaker 3: to ask for hair loss treatments or ed treatments.
Speaker 2: That's Muller who covers healthcare for Bloomberg News.
Speaker 3: And they've sort of evolved from there into a suite
Speaker 3: of other medications for kind of like in some ways
Speaker 3: chasing the next big thing or what's big at the moment.
Speaker 2: And one of those next big things was weight loss shots.
Speaker 3: When drugs like ozempeic and wagov and Zebound and Manjaro
Speaker 3: were in shortage over the last couple of years, that
Speaker 3: allowed pharmacies to step in to make copycat versions of them.
Speaker 2: When name brand drugs are in short supply in the US,
Speaker 2: the Food and Drug Administration allows some pharmacies to make
Speaker 2: what are called compounded versions to fill the gap. That's
Speaker 2: what happened in late twenty twenty two when we go
Speaker 2: Vi first went into shortage, and in May of last year,
Speaker 2: Kim's announced its copycat version of the shots. The company
Speaker 2: saw it stocked spike by almost forty percent, But less
Speaker 2: than a year later, in February of twenty twenty five,
Speaker 2: the FDA announced that shortage was over, which raises the
Speaker 2: question what will happened if Hitts' big bet on weight
Speaker 2: loss shots doesn't pan out.
Speaker 3: They were really going all in on weight loss drugs,
Speaker 3: and it seemed like it sort of caught them by
Speaker 3: surprise the end of the shortage. I mean, they'd just
Speaker 3: run this massive Super Bowl campaign earlier that month.
Speaker 4: They were just.
Speaker 3: Really becoming more and more confident, and then the shortage
Speaker 3: ended and everyone was like What's next.
Speaker 2: I'm David Gera, and this is the big take from
Speaker 2: Bloomberg News Today on the show, how Hymns became the
Speaker 2: king of knockoff weight loss drugs and what's next for
Speaker 2: the company if it can't hold on to the crown.
Speaker 2: Bloomberg's Madison Muller started paying closer attention to him's last spring,
Speaker 2: when the company started selling its own copycat versions of
Speaker 2: sought after weight loss shots. She interviewed the CEO of
Speaker 2: the company, Andrew Doodam, shortly after it entered the market
Speaker 2: for GLP one drugs.
Speaker 4: And so that was May twenty twenty four.
Speaker 3: I went and met the CEO at a hotel here
Speaker 3: in New York, and he talked about how the company
Speaker 3: had plans and big ambitions to get into this big
Speaker 3: GLP one market.
Speaker 2: And one thing Madison wanted to ask Andrew was what
Speaker 2: had taken him so long?
Speaker 3: Honestly, when I sat down with the CEO, I was like,
Speaker 3: why didn't you do this sooner? By the time that
Speaker 3: they got into this market in May twenty twenty four,
Speaker 3: there were lots of other telehealth companies that were already
Speaker 3: doing this, and like for them, it made sense it's
Speaker 3: like sell a popular drug at a discount. That's what
Speaker 3: they were known for, and he said that they had
Speaker 3: been sort of watching the evolution of this market evolved,
Speaker 3: and they wanted to make sure that they had enough
Speaker 3: supply secured because they were just expecting these things to
Speaker 3: immediately be extremely popular.
Speaker 2: Companies like Novo Nordisk, which manufactures ozepic and we go Vi,
Speaker 2: and Eli Lilly, which makes Munjaro and zep Bound, have
Speaker 2: been struggling to keep up with the demand for their drugs,
Speaker 2: and patients trying to get them through their doctors faced
Speaker 2: long wait times and high costs, sometimes as or more
Speaker 2: a month for shots. When Hymns announced its compounded version,
Speaker 2: it priced it at one hundred ninety nine dollars a month,
Speaker 2: and the companies pitch to consumers that you could access
Speaker 2: their version simply through filling out their clinical intake form
Speaker 2: online and consulting with a doctor seemed to be paying off.
Speaker 2: The company doesn't disclose its GLP one sales, but Morgan
Speaker 2: Stanley says that in the fourth quarter of twenty twenty four,
Speaker 2: the drugs made up thirty percent of Hymns's four hundred
Speaker 2: eighty one million dollars in revenue. HIMS and other telehealth
Speaker 2: companies have relied on what are known as compounding pharmacies
Speaker 2: to make copies of popular drugs based on a doctor's recommendation.
Speaker 2: These pharmacies can also tailor dosages or ingredients for individual
Speaker 2: patients who aren't able to use a commercially available product.
Speaker 2: But what set Hymns apart from its rivals is that
Speaker 2: when the company announced it would start offering GLP ones,
Speaker 2: it had a leg up. It already owned two of
Speaker 2: its own compounding pharmacies. Madison went to c one in Ohio.
Speaker 3: Ciant warehouse with a bunch of pharmacists and different people
Speaker 3: doing fulfillment making some of the compounded drugs like their
Speaker 3: gummies in like pasmat suits in.
Speaker 4: The back area.
Speaker 2: Madison says owning these compounding pharmacies is key to him's
Speaker 2: ability to sell compounded medications at a deep discount.
Speaker 3: So the drug makers Nova Noordisk and Eli Lilly obviously
Speaker 3: set their list prices for the medications, which they argue
Speaker 3: takes into account all of the R and D, the
Speaker 3: money that's spent going into developing these drugs, which for
Speaker 3: both companies, you know they've been sort of several decades
Speaker 3: in the making. They also have these very sophisticated injector
Speaker 3: pens that are patented that patients use to inject the medications,
Speaker 3: whereas compounding pharmacies mix the drugs up themselves from active
Speaker 3: ingredients and they don't have those sophisticated injector pens. That
Speaker 3: drugs HYMN sells are a vile with a syringe that
Speaker 3: you drop and inject yourself. They aren't approved by the FDA,
Speaker 3: they don't need to be tested for safety and efficacy
Speaker 3: in the same way, and so they're able to price
Speaker 3: them a lot cheaper.
Speaker 2: In February of this year, HYMS aired an ad during
Speaker 2: the Super Bowl and prepared for sales to keep rising.
Speaker 4: This system wasn't built to help us. It was built
Speaker 4: to keep us sick and stuck, but not anymore.
Speaker 2: HIMS and Hers offers life changing weight loss medications. But then,
Speaker 2: just a week after it aired, the FDA announced that
Speaker 2: GLP one shortage was over. So how did that affect
Speaker 2: Hymns's strategy and what could it mean for its future.
Speaker 2: We'll get into that after the break. In February twenty
Speaker 2: twenty five, the FDA announced that the GLP one shortage
Speaker 2: was over. That meant compounding pharmacies were no longer allowed
Speaker 2: to make exact copies of wildly popular weight loss drugs.
Speaker 2: Bloomberg's Madison Muller says that meant Hymns had to refine
Speaker 2: its strategy.
Speaker 3: Investors were questioning whether there was an opportunity for them
Speaker 3: going forward, and Hyms was just sort of maintaining that
Speaker 3: there was, and you know, investors would kind of have
Speaker 3: to trust them and they would be able.
Speaker 1: To do it.
Speaker 2: And Madison says hyms had two cards to play. The
Speaker 2: first was leaning into what's known as personalization.
Speaker 3: So the FDA allows pharmacies to personalize drugs for individual
Speaker 3: patients when their doctor says commercially available medicines won't meet
Speaker 3: their needs. So what that means is selling them at
Speaker 3: lower doses, adding other ingredients like vitamins or whatever, because
Speaker 3: that makes them different enough from the drugs that are
Speaker 3: commercially available that they're technically still allowed to sell them.
Speaker 3: So a lot of telehealth companies, including Hymns, have continued
Speaker 3: to do that after the shortages ended, and that's allowed
Speaker 3: them to continue selling the drugs.
Speaker 2: And Hyms's other play this year was to partner with
Speaker 2: other companies. In April, Hymns announced a partnership with Novo Nordisk,
Speaker 2: the maker of ozempic and we go v. Under the
Speaker 2: terms of the deal, Hymns would be able to sell
Speaker 2: we govy at a discount, and Novo Nordias would get
Speaker 2: to offer its drugs through Hymns this popular platform.
Speaker 3: That was I think a surprise to everyone when Novo
Speaker 3: Nordisk and Hymns announced that they had struck this partnership deal.
Speaker 3: Because Nova Nordisk and Eli Lilly both have been really
Speaker 3: strong in their statements about companies that sell compounded drugs.
Speaker 3: They are not supportive of it. They don't think that
Speaker 3: it should be happening, especially after the shortages are over
Speaker 3: there filing lawsuits, taking legal action against compounding pharmacies, telehealth
Speaker 3: firms that are selling these compounded drugs, and so for
Speaker 3: them to come out and then partner with one of
Speaker 3: the biggest offenders was I think a surprise to everyone,
Speaker 3: and it seemed like a very unlikely partnership from the beginning.
Speaker 2: But that unlikely partnership between Hymns and Novo Nordisk didn't
Speaker 2: last long.
Speaker 3: There were sort of signs that it had gotten off
Speaker 3: to a rocky start almost immediately, just with the different
Speaker 3: press releases the companies were sending out the ways that
Speaker 3: they were talking about this arrangement, calling it a partnership
Speaker 3: versus just sort of calling it like a deal.
Speaker 4: There were signs that things were.
Speaker 3: Not as they were made out to be, and then
Speaker 3: less than two months later, it all sort of spectacularly
Speaker 3: fell apart, very abruptly. Nov An Artists came out with
Speaker 3: an early morning press release saying that they were terminating
Speaker 3: the partnership.
Speaker 4: The Hymns CEO was on vacation with his.
Speaker 3: Family and Maui and it wasn't until hours later that
Speaker 3: they ended up.
Speaker 4: They didn't even issue a press release.
Speaker 3: He just came out on Twitter and said something and
Speaker 3: then was doing media interviews about it. So the whole
Speaker 3: thing was very dramatic and ended very abruptly.
Speaker 2: So where does that leave Hymns without that partnership, Madison says.
Speaker 2: Investors have started to question whether the company can still
Speaker 2: hit sales targets, and him's's latest earnings report it fell
Speaker 2: short of Wall Street estimates.
Speaker 3: They're not able to do what they once were, and
Speaker 3: so that continues to be a question of how is
Speaker 3: the company going to handle and what's next and do
Speaker 3: they have another product that can sort of replace the
Speaker 3: blockbuster sales potential that they had from GLP ones.
Speaker 2: At this moment. What is the company's attitude toward making
Speaker 2: these drugs? Are they confident that this effort to personalize
Speaker 2: them is going to make it so they can keep
Speaker 2: doing it without any legal backlash.
Speaker 3: They're extremely confident in that they're not alone in that
Speaker 3: there are other compounding pharmacies sort of like the trade
Speaker 3: groups for compounding pharmacies also believe that this is a
Speaker 3: valid and legal way to keep making these drugs.
Speaker 2: But Madison says the drug companies that develop these treatments disagree.
Speaker 3: Nova, Nordisks, and Eli Lilly do not think that, and
Speaker 3: that was part of the reason why Novo ended its
Speaker 3: partnership with Hymns was because they said, you know, we
Speaker 3: sort of had this maybe not official agreement, but thought
Speaker 3: or belief that they would sort of wind down their
Speaker 3: compounding operations, and they didn't. They were continuing to market
Speaker 3: them and Nova was not happy with that. And so
Speaker 3: there is this split right now between people who believe
Speaker 3: that this is perfectly legal and moral and that patients
Speaker 3: should have these alternate options to the drugs that cost
Speaker 3: less are widely available. And then you have the drug makers,
Speaker 3: and you have a lot of doctors who are like,
Speaker 3: we can't have this explosion of essentially unregulated medicines, and
Speaker 3: all of these other considerations, like there needs to be
Speaker 3: a nuanced conversation about it.
Speaker 2: Even as existential questions hang over Hymns's future. Madison says,
Speaker 2: the impact of the telehealth company and others like it
Speaker 2: have changed the market for pharmaceuticals.
Speaker 3: These telehealth companies, for all of the complaints about them,
Speaker 3: they have made these drugs more accessible and that is
Speaker 3: something you cannot deny. I mean, the drug makers themselves
Speaker 3: are literally trying to emulate what these telehealth companies have done.
Speaker 3: Lily has set up Lily Direct. Nova Noordisk now has
Speaker 3: its own direct to consumer offering, and they see that
Speaker 3: there are patients who want an easy option to get
Speaker 3: these medications and sort of trying to meet these patients
Speaker 3: where they're at, which is oftentimes online, but.
Speaker 2: They may not be meeting them fast enough. Novo Nordisk's
Speaker 2: second quarter earnings showed the smallest growth in sales since
Speaker 2: twenty twenty one. Madison says that part of that slowdown
Speaker 2: can be attributed to patients in the US turning to
Speaker 2: copycat drugs from compounding pharmacies, and Denmark based Novo Nordisk
Speaker 2: is losing ground to its US rival, Eli Lilly, whose
Speaker 2: GLP one drugs have been shown to be more powerful.
Speaker 2: But Eli Lilly's performance has also disappointed investors. The company
Speaker 2: had developed a new weight loss pill with the hopes
Speaker 2: it could reach even more customers, but study results released
Speaker 2: in early August indicated that that pill wasn't as effective
Speaker 2: as Wall Street had hoped. On the day those results
Speaker 2: were made public, Eli Lilly's share price fell by more
Speaker 2: than fourteen percent in New York, its biggest single day
Speaker 2: drop in twenty five years, and Madison says whether Hymns
Speaker 2: will remain a player in the market is a matter
Speaker 2: of intense and polarizing speculation.
Speaker 3: I've talked to analysts who say they've never seen a
Speaker 3: debate like this over a company that they covered, especially
Speaker 3: in healthcare, that there's just two very different sides. There
Speaker 3: is a split over whether this is a disruptive, genius
Speaker 3: company or whether this company is just doing something that
Speaker 3: pushes the boundaries too far, and then you do have
Speaker 3: some people in the middle who are like the weight
Speaker 3: loss debate is overshadowing everything else that this company is doing,
Speaker 3: and the fact that they have been very successful in
Speaker 3: ed and hair loss and that they are a profitable
Speaker 3: telehealth company and the biggest telehealth company and sort of
Speaker 3: like setting the stage for the rest of them. And
Speaker 3: then they've set this roadmap for the next few years
Speaker 3: what they hope to achieve. They want to expand globally.
Speaker 3: They're hiring like crazy. They're taking people from Uber and
Speaker 3: all of these other Silicon Valley companies and sort of
Speaker 3: bringing them into him.
Speaker 4: So what's going to happen there?
Speaker 3: You know, all the company be able to grow in
Speaker 3: the way that it's wanting to and sort of laying
Speaker 3: out for people.
Speaker 4: It's I mean.
Speaker 3: It's going to be an interesting story to follow, I
Speaker 3: think for the next couple of years because they've so
Speaker 3: publicly made all of these declarations of what they hope
Speaker 3: to achieve, and we can sort of use those as
Speaker 3: benchmarks to see what happens.
Speaker 2: This is the Big Take from Bloomberg News. I'm David Gura.
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