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Hims & Hers, the telehealth company initially known for, shall we say, discreet solutions, is back at the table with Novo Nordisk. This time, they're hoping to strike a deal to distribute Novo's branded weight-loss drugs. If you recall, the last partnership ended with Novo accusing Hims of "illegal mass compounding and deceptive marketing." Not exactly a solid foundation for future collaboration, is it?
The timing is interesting, to say the least. Hims just reported earnings that, while beating revenue expectations ($598.9 million against an expected $580.2 million), missed on earnings per share (6 cents versus the expected 9 cents). The market usually reacts favorably to revenue beats, but the EPS miss tempers the enthusiasm. It’s a mixed bag, and the narrowed full-year revenue guidance—now around $2.35 billion, tweaked down from the previous high end of $2.4 billion—suggests a need to reignite growth.
Weighing the Weight-Loss Gamble
Hims' core business, sexual health, appears to be slowing. That's not a death knell, but it does signal a need for diversification. Weight loss is the obvious target, but as the previous Novo Nordisk debacle showed, it's a tricky space to navigate. The company has been experimenting with testosterone treatments, menopause regimens, and GLP-1 "micro-dosing," but none seem to have provided the necessary jolt.
The previous breakup with Novo Nordisk raises several red flags. Novo's accusations weren't just about business disagreements; they were about legality and ethics. Has Hims addressed those concerns? Or is this simply a case of "forgive and forget" on Novo's part, driven by market access considerations? Details on why Novo is willing to re-engage are conspicuously absent. I've looked at enough of these announcements to know that when the "why" is vague, the deal is often shaky.
The international expansion plans – Brazil, the U.K., Germany, and Australia – are a longer-term play. The acquisition of Zava for $265.7 million (a substantial sum for a European peer) demonstrates a commitment to this strategy. However, international expansion is rarely a quick fix; it requires significant investment and carries inherent risks. The planned 2026 expansion into Canada, offering generic versions of Novo’s weight-loss shot, also feels quite far off.
Labs and Longevity: A Calculated Bet?
Hims' plan to launch "comprehensive lab testing capabilities" is intriguing. This is clearly intended to support their upcoming "longevity" specialty and injectable testosterone offerings. The move makes strategic sense. More data equals more personalized treatments, which should lead to better outcomes and increased customer loyalty. But the devil, as always, is in the details. How comprehensive will these lab tests be? What will they cost? And, crucially, will customers be willing to pay for them?
And this is the part of the report that I find genuinely puzzling. The shift toward "longevity" feels like a pivot toward an entirely different customer segment. Hims started by targeting younger men with specific, often embarrassing, problems. "Longevity" appeals to an older, wealthier demographic. Can Hims successfully straddle both worlds? Or will it end up diluting its brand and alienating its core customer base? I can't help but wonder if they're chasing too many rabbits at once.
Fool Me Twice?
The renewed partnership talks with Novo Nordisk are a high-stakes gamble. If Hims can pull it off without repeating past mistakes, it could be a major win. But the company needs to demonstrate that it has learned from its previous missteps and that it's committed to operating with the highest ethical standards. Otherwise, this reunion could end up being another costly disappointment. According to Hims rises on revenue beat, discloses it’s again in partnership talks with Novo, the renewed partnership talks are underway.
