Hims' peptide narrative targeted? FDA documents signal regulatory scrutiny.

In the early hours of July 11, Beijing time, a letter sent by the U.S. PSM (Partnership for Safe Medicines, which describes itself in the document as a non-profit organization focused on patient safety and combating counterfeit and non-compliant drugs) to the FDA was disclosed. In the letter, they urged the FDA to refuse to approve the compounding of 7 types of peptide compounds under review.

It's uncertain whether this document was the reason for Hims' slump this week. Well-connected short sellers must have received the news in advance (the letter was sent on July 1, Eastern Time, and only disclosed on July 10).

PSM's document opposing compounded peptides may not be a completely "neutral public safety stance" and may align with the interests of large pharmaceutical companies. PSM has some relationship or interest connection with the pharmaceutical industry, especially PhRMA, the industry organization for large pharmaceutical companies.

PhRMA's full name is: Pharmaceutical Research and Manufacturers of America.

It is the core industry association and lobbying group for large innovative pharmaceutical companies in the U.S. It typically represents the interests of large original drug companies, such as:

Drug patent protection;

Defending high drug prices;

Restricting drug imports;

Opposing excessive price controls;

Maintaining the FDA's formal approval system;

Cracking down on unapproved compounded drugs, generic alternatives, black market drugs, etc.

So PhRMA is Big Pharma's main lobby, meaning it is one of the most important policy influence organizations in Washington for large pharmaceutical companies.

Both Eli Lilly and Novo Nordisk are members of PhRMA.

Leading pharmaceutical companies can do this to:

Reduce competition from low-priced compounded drugs;

Protect the market for branded drugs like Zepbound, Mounjaro, Wegovy, Ozempic;

Maintain higher pricing power;

Reduce patients switching to telehealth platforms like Hims, Ro, Mochi, LifeMD;

Prevent unapproved peptides like retatrutide generics or research versions from entering the market early.

Summary:

This document does not directly target Hims' GLP-1 business, but directly suppresses the future growth potential of Hims' "expanded categories of compounded peptides." However, because the document extensively cites regulatory chaos surrounding compounded GLP-1, it will also indirectly affect market expectations for the regulation of Hims' weight loss business.

The FDA's Pharmacy Compounding Advisory Committee meeting to discuss peptides on July 23-24 is getting very close.