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Huge Opportunity (HIMS) In The Peptide Market? Why Hims & Hers Stock May Benefit + Healthcare Industry Implications
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Ryan Henderson
Will The Fed raise rates 25 basis points in June 2026? IBKR prediction markets let you trade the outcome alongside your stocks and options, earn interest, get it right and earn $1 per contract at ibkr.com predictions. Last trading day June 17.
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Podcast Host
Welcome to Chit Chat Stocks. On this show, hosts Ryan Henderson and
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Brett Shafer
Brett Shafer analyze businesses and riff on
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Podcast Host
the world of investing.
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Brett Shafer
As a quick reminder, Chitchat Stocks is a CCM Media Group podcast.
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Podcast Host
Anything discussed on Chitchat Stocks by Ryan,
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Brett Shafer
Brett or any other podcast guest is
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Podcast Host
not formal advice or recommendation. Now. Please enjoy this episode.
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Ryan Henderson
Welcome into Chit Chat Stocks, a podcast to help you find your next great investment. Today we bring back on recurring guest Travis Hoyam of Asymmetric Investing and Motley fool fame to discuss the fast growing peptide market, which for anyone that doesn't know that would be something like the weight loss, drugs and other investing opportunities in this space. Including, yes, we're going to be discussing hims and hers stock. A stock that has been, you know, it's a popular one. It's gone on quite the roller coaster ride over the last few years. It was once an investing favor. Now they've run into some news, potential noise, some potential troubles, but also as a huge opportunity ahead of it. And Travis is going to lay out everything for us. But first, Travis, tell the listeners. You just wrote an article that kind of inspired me to reach out about this episode, talking about the 1000x opportunity in peptides. But I think for 99% of listeners, they don't even know what they are. So what are these drugs?
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Brett Shafer
Are they dangerous?
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Ryan Henderson
Tell the listeners about them.
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Brett Shafer
Yeah, we should start with that. None of the three of us are doctors, so none of this is medical advice. We're looking at this through an investing lens. And that's what I'm doing with asymmetric investing is trying to find these 10x100x potentially a thousand x stocks because that's how you ultimately beat the market. It's not, it's not, you know, finding a company that's going to undervalue by 20%. It's the massive home runs and having those in your portfolio. So that's the sort of framing that I come to the peptide market, which I think is we don't really know how big this market is really. And that's really the interesting place that we are right now. You said it's a, it's a high growth market. It's a high growth market for a few products. GLP1s are peptides. I don't know if you knew this, but insulin is a peptide. So simply put, peptides are just between two and 50amino acids, is a little bit smaller than a protein. Your body has thousands of naturally occurring peptides and they're just going around your body telling your body what to do. Hey, your, your knee is injured. You, you know, we need to fix this. You know, it's peptides that are kind of communicating with your body. So these have been around for a long time. A lot of the peptides that we may potentially discuss, that RFK has discussed, you know, moving from what's called category two to category one so they can actually be compounded have been around for a long time. It's just a question of what is the use case, who are they going to be prescribed to, what does that infrastructure look like? But it's a growing area of interest because it has been so successful. There's relatively low downside or side effects. And the interesting thing for me is some of these peptides that, that could come to the market in the next, you know, few months could potentially be very, very low cost. And so the impact is very different than, you know, something like a GLP one coming out and being thousands of dollars a month. What if we have, what if we go to a different world where things are more personalized, where we're taking multiple peptides a day? I don't know if that's where we're going, but that's what that potential is for this industry.
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Ryan Henderson
Okay, let's say you're not talking to the hyper focused tech bro from San Francisco. You're talking with your aunt from Wisconsin and she's saying, hey, hey, sorry, sorry, Minnesota.
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Brett Shafer
We don't talk to people from Wisconsin here.
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Ryan Henderson
My family's from Wisconsin. That's why I came up. But then I realized little rivalry there. The. Okay, your aunt from Minnesota and she says, well, Travis, these are un, these are new drugs. People have only been taking them for a little bit of time. I, I'm scared of long term side effects. I don't want to take something that, like with other drugs in the past or, you know, sometimes maybe the actual, you know, the only ones that people remember are the ones that had these long term side effects. But okay, like, why is it not going to kill me 20 years from now? Why should I feel safe taking one of these? And I feel like that's the question to ask of whether these are going to become mainstream.
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Brett Shafer
So there's a lot of things that we, I don't, I'm not going to necessarily have all the answers to all of these things. But the place that we are today, as I, as I understand things with what could potentially be moved to category one is the first thing is is there real harm that's going to happen or is the harm potentially that Brett takes a placebo, you know, and is injecting a placebo and it's, it's not actually doing anything that's not harming you. You're maybe spending money you shouldn't be spending. But if there is the potential for a benefit, maybe that's something that we should be exploring as, you know, as consumers, as the medical community. So I, I think from a harm side, you open up a huge can of worms and you know, this could be its own podcast. But I, I think we tend to, certain segments of the population tend to over index on. Well, the FDA says this is good, this is approved, therefore it is good. And I don't have to ask any more questions or the FDA has not approved this thing, therefore it is bad. And both of those things are probably incorrect, right? Like opiates are approved by the fda. There is a huge opioid epidemic and a lot of those are prescription pills, right? Prince died not far from here, here taking prescribed medicine that was approved by the fda. So I think we kind of conflate those two, those two things. This, peptides fall a little bit more into, you know, the, the vitamin category to me where it's like maybe you're taking, you know, maybe there's some medicinal benefit, but there's no, as long as there's no harm. We should be at the point where we're learning more about this. What are the benefits? How should they be prescribed? What does that infrastructure look like right now? It would be, you would have to be get the prescription from a doctor. If they are moved to category one, you'd have to go through a compounding pharmacy. So there is infrastructure there. This isn't just going to GNC and getting, getting your peptides, but I think, and then you have to think about the, the incentive structure for the pharmaceutical companies too. And anybody listening to this or listening to conversations about peptides, think about what the incentives are of anybody that you're listening to. Because when the big pharma companies go, you know what, we can't do this, it's unsafe. They want to protect their business, right? When we go, when you talk about something like Ozempic, Ozempic was the first kind of blockbuster GLP1. GLP1s are a peptide. But the reason that they make so much money on it is they figured out a way to modify semaglutide so that they could patent it. And once you patent it, then you have something that's protected for a period of years, 20 to 25 years, and then you go through the FDA approval process and then the money machine starts. If we're moving to a world where these peptides, you know, these 14 peptides are going to be approved by the FDA or moved to move to category one, there's frankly probably not a lot of money to be made compared to what the big pharma companies are making. So they're seeing it, I, I think they see it almost as a threat because if this is really effective, it's, and it costs me, you know, a hundred bucks a month for a stack of peptides. I know some, some people don't like the, the word peptide stack, but you know, a number of different peptides that have different impacts on your health. And it's relatively inexpensive. It's a hundred, two hundred, maybe, you know, maybe a thousand dollars a month. But it's not this massive, massive high margin moneymaker that, you know, Ozempic, Redit, True Tide could potentially be. Then the incentives are completely different. And that's something that I think is just kind of a tension in the industry right now because everybody has different incentives when we talk about something like peptides.
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Guest Analyst / Fiscal AI Representative
Okay, I've got a couple questions for you and I want to pull something up real quick. Little plug for fiscal AI here. I am looking at Novo Nordisk to GLP1 drugs, which I, I think it's just two that they have, which is Wegovy and Ozempic.
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Brett Shafer
Yep.
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Guest Analyst / Fiscal AI Representative
And then I'm adding on Eli Lilly's Zepbound and Mounjaro. So for anyone that's wondering, you know, why, why are people talking about peptides? Why is this such a big Discussion? Of those four drugs combined, they generated $20 billion in revenue last quarter. I believe from everything I've seen, that is the, it is the fastest growing drug in pharmaceutical history. So this is like a massive boom and it has massive implications. I remember I was looking at a beer company recently and it's like it's impacting a whole bunch of other consumer brands, potentially restaurants.
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Ryan Henderson
The whole restaurant space is getting decimated. And I actually saw, I think someone gave out for. People are like, well, you know, why are you talking about this right now? The revenue, I think last quarter, and it might be eclipsed this year, might be different from these two categories or sorry, these two companies with these drug classifications are bigger than OpenAI and Anthropic Combined. So it's a huge, just fast growing market, almost as fast as growing as AI.
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Guest Analyst / Fiscal AI Representative
So I guess my question is, I guess two parts. What are the different businesses that you are looking at in the space and actually like considering positions in or have positions in. And then the follow on here is what advantages? Because it sounds like this is like a massive peptide boom. It seems like it's kind of a open race in terms of like get a peptide out there. It seems like regulation's kind of slow to respond potentially and maybe there's some unregulated peptides being sold as well. What are the advantages do the big pharmaceutical companies have? Like why is it just distribution, research and development? Are there like big economies, just economies of scale for like Eli Lilly and Novo Nordisk?
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Brett Shafer
So there are advantages that those companies are going to have in kind of creating custom peptides. So again, they're not going to be looking at making a BPC157, which I think is relatively trivial to make because there's just going to be no money there. But if you look at something like Red, a True Tide is maybe something that you've heard about. They're calling that a GLP3. So the advantage there is versus something like an Ozempic. The weight loss is actually, I believe higher in their current clinical trials. This is not quite FDA approved yet, but they're moving through that process. Probably this year or next year it'll actually be approved by the FDA and actually hit the market. But this is one of those products that, you know, the, the secret is it's been used in Hollywood and the weightlifting community for a long time. And that's where they have sort of, they've figured out a way to, to patent this, to own Red, a True Tide, and then they can turn a business into it. So, you know, Eli Lilly would be one of those companies that I at least keep an eye on. I think they've got a lot of interesting stuff going on. I don't typically with asymmetric investing, I don't typically invest in the company that could potentially be disrupted. And if you look at Eli Lilly, you know, trading for 40 times earnings, 13 times sales, this could be Red of True Tide could indeed be a trillion dollar drug and it would make Eli Lilly a bigger company. But I don't know that it's necessarily kind of, you know, up my alley. So that's an area I kind of follow where I I'm seeing more opportunities is in completely changing the way that we think about healthcare. So if you, you mentioned a company like Hims and Hers, if we get to a point where these relatively low cost peptides are able to be compounded, whether that means that you're going to be taking it in a pill form, whether it means it's going to be an injectable, then you get to this world where, okay, what does that look like? What does a, you know, taking one, one peptide or a peptide stack look like for the average consumer? And to me it looks a lot like what Hims and hers is building where instead of being a one to one relationship with a doctor who may or may not be up on the latest in peptide information and data, they may be, you know, this may be kind of slow. To be clear, it is doctors who are prescribing peptides even today that are seeing a lot of these benefits. So if you're in Hollywood, for example, this is where a lot of this leading research is done, is the people who can afford to have this bespoke treatment. Well, how do you get that to scale? And it's more of a model to me, like Kim's and hers, where I can plug into this digital network and have real time feedback. So we're not there yet. Again, we're looking at asymmetric investments. But who is going to be able to take the information that I'm gathering every single day? I'm wearing a Garmin watch, I have a Garmin scale. So you got information about how I'm sleeping, what my heart rate is, what's happening with my weight on a day to day, minute to minute basis. If I take that information to the doctor and I've done this with my kids, right, we had an outlet. You know, hey, if I share their heart rate information, what would you do with it? And they're like, we, they just don't have a way to take that in and process that information. But a company like Hims and hers could go, okay, we're going to start you on the Wolverine stack. I'm not even sure exactly what's in the Wolverine stack, but the, but that's one of the, the, you know, kind of well known ones. Is this going to work for you? Well, you've got my labs. We could potentially add some genomic information into that to say are these things likely to work for your body based on your genes? That's something that's probably an area, you know, more information needs to come into a system whether It's a doctor, whether it's a platform like him's and hers and then that treatment is probably going to need to be modified or personalized on an ongoing basis. So you know, you would say hey, this is working really well for me but like I didn't sleep, I have not slept well in three nights. Okay, we're going to change this because that is a potential side effect of you know, one of these peptides. I'm just using these kind of as, as examples but this is, I think there's going to be much more kind of day to day adjustments with something like peptides if this goes to, to mass use that we're just not necessarily used to that. The typical pharmaceutical and doctor patient insurance, you know, CVS industry is really, is really used to and built around and again that's where you get disruption. What if this, what if. Let's play, let's play the what if game. This is what my Thousand X article was about is what if? This is the huge deal that some people think it is and the existing infrastructure is just not set up to optimize it. And the incentives are completely different than they used to be because these things are relatively cheap. So you know, the doctor's not making a ton of money, the insurance company isn't making a ton of money. But who could, who could serve these products at a relatively low cost and make the economics work? A company like Kims and hers RO would be another example. They're private, but that's where I'm seeing potential opportunities for disruption with the help of things like peptides. We're not there yet, but that's sort of the thing that I'm looking at on the horizon.
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Ryan Henderson
Here's a quick follow up. Should HIMS and hers buy one of the health tracking device companies?
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Brett Shafer
So we know that they are building a health, they have hired for health device positions. It's actually not far from me here in Minnesota. We have a big medical device community in, in the Minneapolis area. So I don't know what their plan is there. We know they have, they have plans in AI. They even had some, you know, blog release last week talking about hey, we got some AI stuff coming. So that could be really interesting because that's, that's where you get to this place where I, I think we are entering a place with the medical community where there's so much information that you're, you could potentially be putting off about your health. That where does that go and what does anybody do with it? You know, can AI sort of be helpful in that, in saying, hey look Travis, you've, you've been sleeping really poorly and you've gained five pounds. Here's some things you could do, not necessarily, you know, taking, taking anything but like eat, eat a little chicken tomorrow. You know, here's some meal plans. So I think, and then, and then, you know, an AI can be updated with the latest medical information in an instant. Right? That takes a long time to diffuse to the medical community even if something is effective. And, and by the way, you know, I should just point out too that you start diving into the, the backstory in some of these things. Like Ozempic has never been approved for weight loss. FDA approved for weight loss. It is prescribed for weight loss. What's called off label. Wegovy is the same drug but that went through trials at a different dosages than Ozempic did. So you get into these really weird dynamics with the existing infrastructure and again, what does the future look like? What does disruption look like from that infrastructure? That's where I don't have all the answers. But the companies that are looking at this as like, how can we do things completely differently and have better outcomes? That's where I think the opportunity ultimately will be.
- [19:10]
Guest Analyst / Fiscal AI Representative
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Ryan Henderson
Yeah, I mean I feel like you can envision if things go correctly. There's the health tracking layer, there's the AI layer and then there's the personalized medication layer. That could all come together and just be a huge, not only economic opportunity, but people get treated much, much better for much, much cheaper.
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Brett Shafer
Well, and just to, just to tack on, you know, your question about the, the wearables piece of it that may be vertically integrated. It may also be the case where, you know, Garmin would Be an example. Apple Watch would be an example. I wouldn't be shocked if some of these companies end up being looking more like platforms, right? Where you have this information that's coming in from different sources. It. Because I don't, I don't necessarily think like If I'm a hims and her subscriber and I'm using their, their GLP1s or the peptides, then I have to wear a Hims and hers device. I don't think that probably makes a lot of sense. Maybe they make one, you know, a little bit like Google, right? Like we're going to make a, we're going to buy Fitbit, we're going to have Android, but most of the devices are going to be made by Samsung. So I think that makes probably makes more sense because they're just, they're not a device company but they probably want to get to that point where we got to learn about this, we got to figure out what we can and can't do. You know, whoop would be another company, right, that could be tracking some of that information. Maybe that information then plugs into so, so the business model is a little bit uncertain. But I think you're right, Brett, that the, the tracking the information piece is, is potentially another big valuable piece.
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Ryan Henderson
Okay, before we specifically talk Hims and hers as a stock, the last question I have, maybe Ryan has some others as well on the actual industry overall is around the government because they could open up the floodgates. They could also put up huge amounts of roadblocks. And we have people may have heard a interesting person in charge of the Food and Drug Administration at the moment,
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Brett Shafer
to say the least, good or bad, depending on how you're thinking about it.
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Ryan Henderson
Trying to keep things apolitical. But what do you think this could impact the industry? What have they said? You mentioned briefly the taking and about the 19 peptides thing. Again, I don't know much about it. Explain that. How do you think the government could either help or hurt this sort of trajectory for the peptide industry?
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Brett Shafer
So there were 19 peptides. I'm going to get my numbers directionally correct, but I think they're, I think they're right. 19 peptides in 2023. So under the Biden administration that were moved to, to category two, which means you can no longer compound them. So there's this entire classification of companies you may have heard of compounding in relation to hims and hers and making GLP1 semaglutide in particular. So compounding is something is not some Sort of magical, weird thing, you know, when my infant son was sick, he had to get a compounded treatment because you can't just go off the shelf and get. Get something. You got to make it kind of specific. So there's. There's actually a specific law that was passed in the mid 2010s to create this com. There's 503A and 503B facilities, and there's a reason for them. I don't know that that reason for creating those compounding facilities necessarily translates to the way the world works in 2026, because I don't think they were envisioning these companies sending products out. Out at scale. But that's kind of the. That's kind of where we, where we are is that a lot of these things have been compounded, and peptides would fall under that category. But if you're category two, you can't compound them even if they're. Can't typically compound them even if they're prescribed by a doctor. If they move to category one, then. And they. What RFK has talked about is moving 14 of these of these 19 peptides back to category one, where then a doctor could say, okay, Brett, we are going to prescribe you BPC 157. Here's the treatment plan. Here's how much you're gonna take when you're gonna take it, all that kind of stuff. So it would. It would just be another treatment that could then fall under that compounding category. What that then looks like, you know, do we create, you know, pill forms with liposomal technology? I. I don't. I don't know exactly what it looks like, but, you know, right now, the, the sort of foreseeable future would be a bunch of injectables would be available via compounding facilities. Like hims and hers bought a couple of compounding facilities. So they have both a 503A and 503B. But there's a bunch of these facilities all over the country. So all of the, you know, the rose. All these companies have relationships with a 503A or B facility for doing something like. Like Peptides. So the, the other argument that I don't love, but the, the argument that a lot of people in the industry make for moving these to a category one is people are using them anyways, and they're getting them through illegal means via, typically through Chinese suppliers on the gray market or the black market. And you don't actually know what you're taking. I don't love that as a reason for legalizing something right. Like that. That feels a little. I, I would, I would much rather make a argument that is, hey, this is worth g. It's not going to harm people. Let's make sure it doesn't harm people. But let's, and then let's also start gathering information on how beneficial is it. We do this all the time. If stuff gets FDA approved, we find out it doesn't do the thing that we thought it was going to do and then it, you know, gets pulled from the market. Or do we find out that it's amazing and we're all on some sort of peptide stack in, in 10 years. I don't know where it goes, but that's sort of where we are from an FDA standpoint is they've started to crack down on the compounding of GLP1s and I think that's in the, in anticipation of peptides are coming and the way that that will get to market is through these compounding facilities.
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Guest Analyst / Fiscal AI Representative
Okay, before we talk more specifically about hims and hers, I want to ask what industries do you think will be the most impacted? I'm going back to the. I think Buffett had this analogy when cars were coming along. Like you would have seen that there's going to be like cross country roads, there's going to be a million cars or millions of cars on the road and you'd think to bet on the cars. But the right thing to do would have been short the horse industry or whatever.
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Brett Shafer
Yeah.
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Guest Analyst / Fiscal AI Representative
What industries do you think are the horses in this case?
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Brett Shafer
I would be very worried about owning any of the existing infrastructure in healthcare. So that goes from insurance companies to the hospitals. And the reason is, I think the incentive structure that's in place today is so, is so backwards. Right. Like if you think about, I don't know if you guys were following things back when like Obamacare passed. But, but the idea with Obamacare is get everybody insurance. What ended up happening is if you look at the incentive structure with, with that law and with. What ended up happening is if you're UnitedHealth and you have a million dollars worth of revenue, you can only make $20 million. You can only make 20% in profit. Operating profit I think, I think is the. But, but there's a limit on how much profit you can make. So how do you.
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Ryan Henderson
Correct. Yeah, that's.
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Brett Shafer
So how, so how do you increase your profit? You have to increase your revenue. Well, we're not adding, you know, there's only a certain pool of people. So the industry as A whole only has a certain pool of people. So to compete on cost would just be to be cannibalize other companies. So the incentive for the entire industry is just to continue raising prices. How do you raise prices? Well, you go, you don't do this directly, but, you know, indirectly. Hey, doctor, if it, if, if this treatment happens to go up in cost, I'm fine with that because now my costs go up. Now my revenue can go up and my profits can go up. Oh, these pharmaceuticals, we're going to cover more of these pharmaceuticals because now we're going to be spending more money, which is then is going to mean we're going to, we're going to raise our prices next year and we're going to make more profit next year. Like the entire industry from Dr. All the way through to insurance company is to increase costs. There's nobody in that, in that existing infrastructure whose incentive is to lower costs. And you can look at something that's, you know, more unregulated. It's not completely unregulated, but like, but like Lasik, right? That is, doesn't go through insurance typically. It, you pay cash for it. The cost of that has dropped like a rock over the past 20 years and the quality has gone up. So if we move to a world where the thing that I think is fascinating about hims and her specifically, you can go back through their conference calls and they typically get a question every, you know, quarter or two about, hey, when are you going to start taking insurance? And Andrew Dudim has said, we don't want to take insurance because you can't disrupt the status quo if you're living within the status quo. And so that entire infrastructure, I think is very highly valued today. You know, we talked about Eli lilly trading for 13 times sales because investors think that it's all very safe. And that may be true for a while. But you could go back to 20 years ago. You could look at Coca Cola, Budweiser, Kraft. These are obviously these brands are going to be around for a very long time, right? And they're still around, but their profits and their revenue have not grown over the past 20 years. And their stocks have done horribly because the, the entire industry changed. It went from do I have shelf space in the grocery store? To you know what we, we got a lot of. If you want to build a mustard brand, you can just take out Instagram ads or you can, you know, so the whole supply demand dynamic change. I think that's gonna come for the, the health industry, where now I don't have to go to a doctor, a physical doctor to get answers to my questions. I can go to Hims and hers. I can go to ChatGPT has a, you know, a medical, you know, tab or whatever. Now I think that technology piece that has come for every single industry over the past 30 years is going to come for medicine. And, and the incentives for a telehealth company are completely different than the incentives for doctors, pharmacies and insurance companies. And that's how disruption works, is you come in with a completely different incentive structure that the existing companies can't respond to. And so when you see companies, you know, the battle between Novo Nordisk and Hims and hers was fascinating because Novo has no answer. Like they have no, there is, there is no answer other than regulatory capture. And, and that is how you know you're being disrupted is, is because you go, wait a second, this isn't fair. No, these guys are bad and you say all kinds of mean things because they're, you're not winning on the merits.
- [31:06]
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- [32:39]
Ryan Henderson
to have another conversation about Oscar Health stock, which I think you maybe have some interesting thoughts on. Although, you know, I, I don't know if you follow it that well, but
- [32:48]
Brett Shafer
I follow it a little bit. But again, they, they are coming at it things from a different angle and, and I'm, I'm intrigued. I don't, I don't own them yet.
- [32:56]
Ryan Henderson
They. Hey, if this thing happens and the entire industry paradigm of the last 15 years or so gets disrupted, they could be to benefit. Yeah, that's it. That could be up your alley as well, but we don't have time. Today we're talking Hims and hers. The saw you mentioned the saga of the last year, it's been what it seems like for someone that follows him loosely is once a week open up the Twitter timeline and ope Hims and hers is either going to the moon or the company's going bankrupt tomorrow. And the company's taking a lot of risk. You've seen the management say things publicly. There's rumors that get tossed out there about their tactics. Why are they doing certain things? Let's start out with what exactly happened. I see the stock down maybe 80% from highs. I mean, there was a, you know, a period where they kind of just went crazy with that stock price. But what happened? Why. Why are we trading at $20 today?
- [33:49]
Brett Shafer
Yeah, the current drawdown is 72%, but it did hit almost 80%. Okay, a lot of pieces going on here in. I'm going to try to get my years right. 2024, the. There was a shortage of GLP1s. So the, the FDA has this rule, okay, if there's a shortage of these branded products, then you can compound them. So, so we talked about those compounding facilities that hims and hers owns. That was a huge boon for hims and hers. So you come in. I think that announcement came late in Q2, 2024, they had a ton of growth in Q3, Q4, end of Q1, 2025, the shortage ends. So that means that companies like Hims and hers and all of the telehealth companies, you know, RO medv, the company that got a bunch of attention on from a New York Times piece. All are. Were selling compounded GLP1s, either through facilities they owned or facilities that they were. They were contracting with. Then you get to the end of. End of Q1, and there are still exemptions for selling compounded GLP1s, so the personalization exemption. So let's say that you're taking a GLP1, you're taking Ozempic or WeGovy, and. And you're on the lowest dosage, but it makes you sick. Then your doctor, you know, and again, typically these compounding. The law was created so that your doctor could say, okay, Brett, here's. Here's what you're taking today. I can give you a lower dose, but we have to get a compounded treatment because there's no branded, you know, pen or pill that's available. So we have to get this, you know, kind of personalized dose. And that is the exemption that they used. But they kind of use it at scale. Right. And if you're a Hims and hers, if you're a ro, you can kind of massage your questions, you can massage your dosages to say, you know what? Everybody needs a personalized dose of GLP1s. And there's. And so they. Were they operating illegally? No. Were they operating in a very gray area? Yeah, probably. And until the. The fda, you know, cracks down and says, hey, no more of doing this, these companies were basically pushing as far as they could. Not just Hims and Hers, but all the other companies as well. What happened earlier this year was Novo Nordisk sued Hims and Hers. This did not have to do with their compounding, what their. Their marketing tactics. It had to. It was a patent lawsuit. That's really important. So I had a huge piece that I put out on asymmetric investing about this. I drug my patent attorney friends into the weeds over a weekend. So to get as much information I could. But what happens with a patent case like this is Novo Nordisk says, hey, Hims and Hers, we don't actually own Semaglutide, but we own the modified version of Semaglutide that we're putting in our branded products. And we think that you are violating that patent with your compounded treatment that you're selling. So we didn't actually get any answers about that, like, because we never got to discovery, we never got to, you know, arguments, but that this was a patent case, not an FDA case. So I just want to make that really clear for people. The implication there is. And this was always the implication. This is when the Stock dropped like a rock and everybody accused Hims and Hers management of being, you know, shady and blah, blah, blah. But if you look at that case and what the incentives are in those cases, there was never an incentive for this to be something that decimated Hims and Hers. Because if Novo Nordisk was going to win that case, it was probably not going to win until 2030 or 2031. That's just how long these patent cases take. And if they won, they would probably get a license award. So maybe they win $100 million. And in the meantime, you know, Hims and Hers does a billion dollars worth of sales, but they don't take, they don't take that billion dollars worth of sales and say, hey, you know what? This actually belongs to Novo Nordisk. They just say, what. What sort of license fee would you have had to pay if you were to be licensing this technology for this patent From Novo Nordisk? 2031 is important because that's when Novo Nordisk's patent expires for the semi glue tied in the US Already expired in Canada. So all of you add all these incentives together and it's a really, really big headline. But at the end of the day, it was always likely that they were going to come together and go, hey, Hims and Hers, we'll stop compounding or we'll do less compounding. But we, we want to sell your branded treatments and we want to sell it at a low cost. Right here's the disruptive piece is coming into this. In 2024, when all this started, Ozempic was like $2,000 a month on Hims and Hers. Today you can get Ozempic for, I think it's $150 a month. So you look at all these ups and downs and all the battles, you now have a world where branded GLP1s are a tenth of the cost of what they were three years ago. And now they're also available on Hims and Hers. So it's, it's a lot of finagling, a lot of battling, a lot of, you know, press releases going back and forth, but ultimately has turned Hims and Hers into much more of a platform business. And I think turning a little bit away from their, from their compounding, you know, vertically integrated compounding, and trying to, you know, be in this gray area. And I have a feeling that they know that Peptides are coming and that's going to kind of fill the gap and create another layer of opportunity. So they're happy to work with these companies that are creating branded, branded GLP1s, both injectables and then also the, the oral products that have come out this year.
- [39:54]
Guest Analyst / Fiscal AI Representative
Yeah, it's been kind of funny watching Hims and Hers from the sidelines because it is, it's a battleground stock. There are very vocal bears, very vocal bulls. And it seems like a lot of the headlines seem to confirm both sides somehow. They both cheer whenever a new headline comes out. But yeah, this one in particular was funny because all I saw was headline Novo Nordisk suing Hims and hers.
- [40:25]
Brett Shafer
Yep.
- [40:25]
Guest Analyst / Fiscal AI Representative
Four months later, Novo Nordisk and Hims and hers are partners. It's like, yeah, anyway, but okay, on Hims and Hers specifically, what percentage? I don't know if they break this out, but how much of the business is related to GLP1s or peptides, weight loss drugs in particular?
- [40:46]
Brett Shafer
Oh, goodness, now you're gonna. It's only about a quarter. I forget what the guidance is for 2026. And they don't, they don't guide for GLP1 specifically, they guide for weight loss. So GLP1s is probably going to be a huge portion of that weight loss. But they will talk about, you know, they have, they have weight loss pills, you know, generics and things like that. So it is a big business and it has been a big driver of their growth in the past. I think that's, you know, probably the, the most salient argument against them is like, how much would they have actually grown had they not been bringing GLP1s to market? And they probably would have grown, but definitely not at the, I think it was 100 rate for a while there as GLP1s were booming. Because the other thing that, that GLP1s have done as the Hims and hers business model has evolved, if they've gone from selling things like ED pills, which you're talking about, I don't know, 20, 30, $50 a month, to GLP ones that were, now you're talking about a couple of hundred dollars a month. So they had growth in their members, as they call them, the people who are actually buying stuff from them. And, and they had growth in the order volume on a monthly basis. So it was, it was kind of a double whammy there. So I, it's, it's a important piece of the business, but this is not a GLP1 company. So again, it's always kind of confusing because it gets all the headlines, but then you actually listen to a conference call or watch the numbers and it's not, it's not as big as you might think.
- [42:20]
Guest Analyst / Fiscal AI Representative
Yeah. To kind of back up the point you're making with some data. Fourth quarter of 2023. So two years ago, average revenue per subscriber was $55 monthly. Two years forward, we're looking at $82 monthly. So you've seen a 60% jump across their whole subscriber base, which is massive, especially considering they also continue to add more and more subscribers as well. But I'll stop the share there. We've done plenty of fiscal plugs. Any questions from you, Brett?
- [42:58]
Ryan Henderson
Yeah, well, and I will add, since they are advertiser, fiscal AI chitchat. The link is in the show notes get 15% off any paid plan. I think we had some listener questions around this as well. I think I can combine everything into really one question here. There's people asking about management, which I think for myself, I get nervous about. Maybe crazy is the wrong term, but aggressive management teams that, you know, uber style aren't afraid to push the boundaries. There's also listener that wanted to talk about, hey, there's a gigantic range of possible outcomes with hims and her stocks. How do you try to weigh the different odds here? And I just want to ask, what do you think the opportunity is, your thoughts on management? Kind of just what does the future potentially hold? As someone who follows the stock closely?
- [43:45]
Brett Shafer
I'll start with the management piece because I think this is something that probably gets, you know, a lot of attention from people. Andrew Dudum, I think makes a lot of people uncomfortable. I, I love what he's doing. I think if you, if you have a, if you study disruption and how disruption works, how companies need to operate differently from the status quo. We, this is why we talked about the FDA stuff. Right. Hims and hers is trying to do things differently, not do the same thing that every other company is doing because that's not how you win in this market. If they're not doing something differently, then it's not an asymmetric company. So you look at. Is he pushing in certain areas that maybe you or I would be uncomfortable with? Maybe. But also, you know, and this was a big part of when they, when that lawsuit came down. I did a big, big piece on look who's on their board of directors. And it's like the former FDA head of compliance, a former executive at Novo Nordisk. These people know what's going on and what the buttons they can push are in the industry. So I think every founder who is successful long term and has 10x100x outcomes is going to make people uncomfortable at some point. I think that's where we got to with Dudum was this was maybe a button that some people wouldn't have pushed, but they did push it, and guess what? It ended up, it ended up working out pretty well for them. And the, the, by the way, the thing that pushed them over to the edge was they introduced this, this compounded pill version of Ozempic or WeGovy. And that was where everybody got upset. The FDA got upset, Novo Nordisk got upset. So, you know, is that a miscalculation or was it a calculated bet? Hey, we, we think this is a button that we can push to, you know, they know that the, the only thing that Novo Nordisk can do is sue them on patent grounds. And like we talked about earlier, that's going to be a tough battle for them. You know, it's very possible that their patent would have been invalidated as well. I don't necessarily think that's likely, but it's, but it's a risk. If you're Talking about a $30 billion business, do you want to risk that for a company that's doing two, two point something billion dollars worth of revenue? You know, that's probably not a good bet when you only have five years left of this patent in the first place. So think about if you're, if you're interested in Hims and hers and Andrew Dudum. Listen to the way that he talks about the business on conference calls and the way that he talks differently from the existing infrastructure. We're only going to take, we're only going to take cash. We're not going to deal with insurance because we want to democratize this medicine that is only available to wealthy people today. You know, historically, that is a phenomenal place to be for a business, right? Black cars. Getting a ride in a black car, that's something rich people could have done 20 years ago. Suddenly Uber comes around and I'm taking black cars with my friends to, to go out on Saturday night and, you know, tracking it and finding out exactly like this is what so many disruptive businesses are built on is what are the, what's the top, you know, 0.1% doing? And then how do we bring that to the masses? And the other thing from, from a opportunity standpoint with Hims and hers, I think you have to look at both opportunity and risk. And this is what asymmetric investing is all about, right? Like limited downside and unlimited upside. That's when you hold a stock. The only Money that you can ever lose is the money, the amount that you invest. You invest $1,000 in hims and hers, you can't lose 10 grand. So the stock is trading for two times sales as we're recording today, 30, 30 times earnings. Yes, they are profitable, a profitable company. Today they have gotten to that point where they're getting operating leverage. Their five year compound annual growth rate is 74%. So even just looking at those multiples and you go, it seems like that should be a much more valuable company than that. You have like Palantir trading for what like 100 times sales and their growth rate is lower than that. Then you look at, okay, so it's a $4.4 billion market cap you're talking about. Pharmaceuticals alone are over a $400 billion business just in the U.S. okay. They also added, you know, Zava and eucalyptus in the last year to get more international growth. So the potential there is, is a massive market that's on top of all of the other pieces of the healthcare industry that they could potentially be impacting. And we don't know exactly where this company is going to go in the future, but this has all the hallmarks of an asymmetric opportunity. And the worst thing that can, that could happen is that it could go to zero. And that's absolutely possible. That's possible with any stock that I invest in or that any of us invest in. But this fits everything that I want to see with a company that is disruptive. It's a massive market, it's founder led, he's pushing the envelope and there's a ton of optionality in the business. So 10 years from now, do we look this at this as a company that's suddenly got 50 million subscribers and it's kind of like the Netflix of healthcare where it can just kind of, you open it up and you go, you know, maybe you guys, we have the kids app. I gotta put my, my proposal out there. But you know, you got him's hers. And I think, you know, you get to a point where you have a kids app, you open it up and you go, hey, it's midnight on a Friday, my kid is sick, hims and hers. Here, you know, here's, here's a picture of their eardrum, here's a, you know, here's their temperature, blah, blah, blah. And then boom, that stuff's delivered to your door an hour later. That's the kind of thing that's disruptive, you know, what does the peptide stack look like in the future? If that is a thing. This is the kind of company that can bring that to market. So I just think they're sitting in a really good position as a potential aggregator to use another, you know, investing strategy word that I, that I really like to use. If they get to that point where, you know, 2.5 million subscribers today, maybe 4, 4 to 5 million with their recent acquisitions, you start 10xing that now. You start now. It's a very different conversation with those suppliers now. Now who has the power? You become the Netflix where you go, ah, you know what, we're fine if we don't have Ozempic anymore because we got these other, we've got these other treatments that we can have. So I, we don't have all the answers today, but that's the point of Asymmetric Investing is, is 10 years from now, 20 years from now, is this going to be the kind of company that could continue to grow like this? I think it could be. And that's where I'm seeing a ton of opportunity as everybody else gets bearish.
- [50:30]
Guest Analyst / Fiscal AI Representative
Okay, I think this is our last question. Unless Brett has some more as well. What do you think investors miss about him and her stock?
- [50:43]
Brett Shafer
I think it is natural for most people to reject the companies that are doing the most disruptive things, right? So if you're pushing against the fda, you're pushing against big pharma, you're pushing against, you know, the way that doctors work, right. It is comfortable to say, hey, I have this one to one relationship with my doctor. They know, they know all the answers and that's who I trust. I'm not going to trust this unknown person from a telehealth app. So you could have said all those things about Uber when they launched, right? Why, why would you get into a black car, much less a random person's car and you know, and take a ride. This is always what happens is the bleeding edge of the, of disruption is very uncomfortable. And even if this is not the right stock for you, it very, very well may not be. I think it is a very good one to watch, to see how disruption works and how industries respond. Because when I see companies like Novo Nordisk or Eli Lilly getting really upset with the hims and hers of the world, that's how you know that they're, they've really got something and we'll see where it goes. So like I said, it's. There's no guarantees, but, but I think watch this disruptive picture because that's what I've been, you know, studying that's what I write about constantly is this is what these are the hallmarks of disruption and they've got everything there so worth worth keeping an eye on if nothing else.
- [52:19]
Podcast Host
If you used Babbel you would. Babbel's conversation based techniques teaches you useful words and phrases to get you speaking quickly about the things you actually talk about in the real world. With lessons handcrafted by over 200 language experts and voiced by real native speakers. Babbel is like having a private tutor in your pocket. Start speaking with Babbel today. Get up to 55% off your Babbel subscription right now at babbel.com Spotify spelled B A B B E L.com Spotify rules and restrictions may apply.
- [52:48]
Ryan Henderson
Okay, I'll let you finish things out here with a little pitch for asymmetric stocks as well as maybe my final question. Any other stocks that you're looking at in the industry I know you've looked at out slightly different, you know, it's healthcare related. Any other stocks kind of in the health care disruption space that pique your interest?
- [53:10]
Brett Shafer
I mean outlet is the one that I think it's a very very small company to be clear. So very different, you know, kind of risk reward profile. I am watching Eli Lilly just from a, just from an operational standpoint. But most of the companies that it would be in that disruptive space, the rows of the world are still private, you know, even some of the trackable companies. I guess the one company that is in the asymmetric portfolio that's kind of adjacent is Garmin. So that would be the play on the human data feed is I think what I called them. So I, I just, I imagine that in the future the data that we're all creating on an ongoing basis that I, I, I, that's got to only improve or increase in the future and that's the kind of company that is going to be I think creating a lot of that data. So yeah, those are some of the companies I'm following in asymmetric investing. So if you're interested I got a YouTube channel but then also the newsletter is asymmetric-investing.com and there's a free side there but that's where I'm putting all my research. And then I do deep dives on stocks that I call spotlights and then once I do a spotlight on an article, it's kind of like initiating coverage if you will that goes into my asymmetric universe. And then I buy stocks once a month and my idea there is to show people how you can build wealth, how you can beat the market by just buying these asymmetric investments on an ongoing basis. Not all of them are going to be winners, but those winners are going to just drown out the losers because that's the way that the market works. You know, the nvidias of the world just drown out the companies that end up going bank bankrupt. So trying to find those 10x stocks over the next 10 years, companies like Hims and hers, what, what I'm going to be following. So yeah, you want more from me? Check that out.
- [54:53]
Ryan Henderson
All right. Yeah, and the link will be in the show notes there as a disclosure for all the listeners, we are not financial advisors as well as doctors and anything we say on the show is not formal advice or recommendation. Ryan I already podcast Guests may hold securities discussed in this podcast, may have held them in the past, and may buy, sell, or hold them in the future. Thank you everyone for listening to this episode and we'll see you next time.
- [55:31]
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