Hims & Hers | Andrew D. Interview
Better Than Earning Calls - From himshouse.
This week, the Himshouse podcast (
, with the same handle on X & YouTube) interviewed Hims’ CEO, Andrew Dudum.Here’s the video if you’re interested.
I wanted to cover this in the weekly update but after watching it, I thought it deserved a specific write-up as it’s a banger. This interview was better than any earning call I’ve listened to, and I really hope we see more CEOs interact with the retail community in the future.
But enough talk. Feel free to follow them for Hims centric content. I’ll dissect this interview & highlight the important information - there was a lot.
GLP-1, Semaglutide & Regulations.
This is the biggest topic & we finally got answers. To put things in perspective, the issues for Hims started when the FDA removed semaglutide from its shortage list, forbidding companies from reselling or compounding it. The drug was a big source of revenue & growth for Hims and the market interpreted this as the end of the growth story.
Many - and I, think otherwise, and Hims posted a really strong guidance even without this business.
Most market participants right now do not believe Hims can achieve such growth without compounding semaglutide & find the guidance way too optimistic. And Andrew answered.
Semaglutide & Regulation.
First of all - we knew this but didn’t have clarifications on how it worked, Hims is still able to compound semaglutide under specific conditions. This is confirmed by their legal team & board members, notably Deb Autor, a former FDA commissioner.
“Can you assure us that, yes, your team has done a deep legal review of this issue and all of the regulatory aspects and that your strategy reflects that review?
Andrew: That's a nice and easy one. That is for sure.”
The rules are clear, Hims follows them, and Andrew finally gave some details on what they can and can’t do.
“Patients have access to personalization when providers find it is clinically necessitated. And that means that the personalization and the treatment they're receiving has to be different in a material sense. And how this is actually documented is often 10% or more different in dosing or form factor for the purpose of some type of clinical need, some need such that the commercial dose doesn't actually suffice.“
So, we have a better idea, and we can extrapolate some data from there. We know that most patients - around 60%, stop using GLP-1 after three months.
Why? Mostly because of side effects that impact their daily lives - effects that could be avoided with specific dosages, probably with 10% or more refinement.
“So our providers who have now treated across the platform tens of thousands of patients very naturally start to get to the point where they have patients experiencing these side effects and allow for personalization. That is by the book allowed through the 503A exemption.”
Pretty clear. The playbook also is from here.
“We are actively communicating to patients that if they are on a commercial dose, that treatment will be pulled from the platform. New customers already cannot access those treatments. We are canceling subscriptions for patients on the commercial doses. For those that actually needed a personalized treatment that the provider prescribed, those patients are allowed to continue on the platform with that personalized treatment.”
This seems to confirm that Hims can & will keep a very reasonable chunk of their semaglutide business, legally, while still being able to onboard new patients if they need a 10% or so dosage modification - which seems to apply to many patients.
What was assumptions is now confirmed.
Weight Loss Alternatives.
As we’ve seen, semaglutide isn’t the only weight loss drug Hims proposes. As patients see their commercially available dosage canceled, they have the opportunity to either get them from other providers or migrate to other products, mainly Hims’ oral drug.
“Many patients are choosing the oral medications […] The oral business is an incredibly robust business and it's for one very simple reason. You're getting 2/3 or 3/4 of the weight loss for 1/3 of the price. And you're not injecting yourself, you're not self injecting [...] And so we see a tremendous amount of patients interested in that business.”
Sure, the revenue growth is lower from an investor’s point of view, but it’s an alternative to losing clients. And once again, I have to talk about compounded liraglutide coming to the platform “very shortly”.
Core Business Growth.
This is about proving that growth isn’t solely due to GLP-1, as many believe. No, Hims isn’t just a GLP-1 online pharmacy. They are a customized platform for patients’ wellness, covering all kinds of topics.
“What I would say is like legacy businesses like our original categories, men’s sexual health, things of that sort that are at real scale that are still growing, you know, 40+ percent year over year.”
This isn’t small growth and isn’t just due to easier comparisons but to strong retention & acquisition.
“We treat 10 to 15,000 new patients per day.”
We could extrapolate this and take the ARPUs from Q2, before GLP-1 was offered on the platform.
At $57 per patient and 15,000 new patients per day on the platform, we’d be talking about a $77M increase in revenues per quarter without GLP-1 commercialized doses. These aren’t the numbers of a dying company that relied on one product, and this number is actually stable compared to what it was before it.
Now, this calculation is very rough and certainly not accurate, but it gives an idea of the potential, even with compounded semaglutide “gone.” The company still attracts many users for other services.
Business Model.
We also got some comments on the business model and how management views the company and its service. As I’ve personally said, Hims isn’t about the drugs but about personalization - delivering the best service in terms of products & ergonomics so patients receive value worth their money.
Andrew often compared Hims to Amazon or Netflix. It isn’t about the product but about the service.
“The model of consumer centric healthcare is obviously the future model. So when I think about those companies [Amazon, Netflix etc…], I'm always kind of going back to the consumer centric words, right? It's beautiful, it's personalized, it's on-demand, it's affordable, it's mobile centric.”
Again: personalization. It’s hard to believe he’s wrong.
“we only make money as Hims & Hers when you as the patient are happy, if you're not happy, if you're not feeling better, if you don't feel taken care of, if you don't think it's worth it, you just cancel.”
And that’s the direction the company will continue to take, as it should.
“So what you'll see from us in the next 10 years is more innovation on behalf of the consumer. You'll see broader selection of categories, new categories like pain management, like sleep, like hormonal balance, testosterone therapies, perimenopause, menopausal therapies, longevity, cardiovascular preventative care, diabetes preventative care. When you think about all of what I just said, you pretty much make up about 80% of the reason people die in the US.”
This is the direction Hims is heading, and this is the bull case I’ve talked about many times now: consumer-centric, personalized, ergonomic, easy, centralized - a platform patients trust to deliver the best service and the best products.
A personalized platform for their health and wellness.