Shares of Hims & Hers Health moved sharply higher on Thursday, extending gains from the previous session after a significant regulatory shift signaled new opportunities in the peptide market.
The stock rose about 4% to $25.28 on Thursday morning after closing up 14% on Wednesday, as investors reacted to comments from Robert F. Kennedy Jr. regarding changes to peptide regulations.
Regulatory shift boosts sentiment
The rally followed an announcement that the US Food and Drug Administration would loosen restrictions on certain peptide substances. Kennedy said the agency would remove several peptides from a category of drugs considered to carry significant safety risks.
He also said regulators would roll back a Biden-era initiative that classified peptides as Category 2 substances, citing safety concerns such as cancer and heart-related risks.
The move was framed as a “long-overdue action to restore science, accountability, and the rule of law,” according to Kennedy.
The FDA has also scheduled a meeting in July to review whether seven peptides should be permitted for production by compounding pharmacies, a step that could further shape the regulatory landscape.
Despite ongoing safety concerns and limited clinical evidence, peptides have gained popularity in recent years, particularly for uses such as muscle building and injury recovery.
Expansion plans and strategic positioning
The regulatory developments are seen as a positive catalyst for Hims & Hers, which has been exploring entry into the peptide market.
The company, known for its telehealth platform and weight-loss offerings, acquired a peptide manufacturing facility in California last year, signaling its intent to expand into the segment.
Peptides are already central to parts of its business. Semaglutide—the active ingredient in Novo Nordisk’s weight-loss drug Wegovy—is itself a peptide, and Hims began offering it on a compounded basis in 2024.
Earlier this year, the company also reached an agreement with Novo Nordisk to sell branded Wegovy and Ozempic injectables, as well as branded oral Wegovy, marking a shift away from compounded versions of the drug.
The easing of regulatory restrictions could allow Hims to broaden its product portfolio and tap into new revenue streams tied to peptide-based therapies.
Analysts see upside but caution remains
Analysts have begun to factor in the potential upside from the regulatory shift. Bank of America raised its price target on Hims to $25 from $21 while maintaining a neutral rating.
The brokerage said the FDA’s move could open the door to additional revenue opportunities and allow the company to repurpose existing GLP-1 capacity for other peptide therapies.
To reflect these prospects, Bank of America increased its valuation multiple assumption to 25.5x from 21.5x.
However, the firm also cautioned that the FDA’s actions represent only an initial step and do not guarantee that any peptide substances will ultimately be approved for compounding use.
For now, the regulatory shift has provided a near-term boost to investor sentiment, even as longer-term outcomes remain dependent on further policy decisions and clinical considerations.
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