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