Hims & Hers CEO Andrew Dudum on telehealth's next act: personalized diagnostics, compounding, and $2B+ revenue

can get twice a year annual testing and then have all those biomarkers come into the platform and have thousands of doctors essentially overlook it coupled with our AI to be able to prescribe and treat very specific treatment plans for you.

So, it's not just a data dump of here's, you know, 120 biomarkers, good luck, throw it in chat BT, but but it's actually real providers that are then helping you make um tactical personalized prescription next steps. So, we have about a million square foot of pharmacy compounding in the US.

So, we actually make a lot of these medications ourselves. So, if you're a person that comes in like me, low vitamin D, uh you know, testosterone's not as optimized as I want to be.

So, it's going to be a zinc and ashwagandha or magnesium supplement along with core pharmaceuticals, let's say for heart disease like a statin. We'll be able to actually put that together for you in a form factor that you love.

Um, you know, customized into a beautiful personalized treatment and then delivered to your door for something like 30 or 40 bucks a month.

So it's really this vision of a completely unified system that gets to know you, optimizes you and then actually can verticalize the the making of treatments for you uh so that we can see you get better and help you kind of get preventative given we're in a country here where almost everybody dies of preventable disease, right?

It's like heart disease, heart attacks, diabetes. It's stuff that takes like 10 to 20 years to develop. We should be able to get ahead of this stuff and actually start people you help people change that course of direction. How do you how do you think the labs market evolves? There's a ton of players in the space.

This is obviously not your core business, although it feeds into the core business. I think there's players that are trying to use labs as like a wedge to then go and compete with you guys. You guys are kind of doing the opposite. But do you think that margins on labs like effectively go to zero over time? Zero.

It's going to go to zero. Yeah. I think anybody who's in the labs business today whose core business is labs needs a new business. You know, you've got Quest and Lab Corp have been great partners. They've got thousands of locations, you know, 1015 billion dollar public companies each of them.

Um there's no way that those margins will be constrained when you have a platform like ours where it's in our it's in our best interest and it's in our consumer's best interest to verticalize this infrastructure over time and give it away for free, right?

for for you guys or anybody who's a his or hers customer, it's to our benefit that we do a full panel and and get you that at cost or even as lead genen, right?

Like we can we'll we'll pay you to take it eventually as you actually verticalize this infrastructure because the data you then get back from it allows us to give you very tangible next steps and manage your care over you know 5, 10, 15 years which is really where the long-term relationship and value creation comes from.

So, you know, for us, um, you know, we're excited about these price points. It's $1. 99 for a base package. It's $4. 99, uh, for the advanced package. You know, my hope in 3 years from now, and my CFO would be mad if I said this, but it's like my hope is it's 30 bucks, right?

And and it just gets added on to your Hims and Hers member membership. And if you have a treatment with Hims and Hers at all, you get this stuff for free, right? Because it just makes the platform and it makes your precision care that we can deliver so much better, right?

Say you're a hair treatment and you're taking, you know, our oral chew for hair loss, which is like finestride and minoxidil, and then we figure out that you're pre-diabetic, right?

Our ability to compound that with a low dose of metformin or some type of other, you know, micro doing GLP-1 or GIP, like that just transforms the actual clinical outcome for you. And it all started with a very simple relationship, which is I'm worried about my hair. I want to start taking advantage of that.

I want to know your take on these.

I have this hot take that it was never a good idea at all because you can just take a full vial of blood and it was even if it worked it wouldn't be that big of a product because if I go to the doctor and they take this much blood instead of this much blood it's just not that big of a deal.

Do you think if therronos had worked uh that would be a successful product? Would that have reshaped like was there ever a chance that would have been a great thing? Yeah. The only reason that the idea for Theronos is interesting was if you can do at home diagnostics as opposed to in office phabbotomy. Sure. Right.

So you know that that burden of leaving your house going to a doctor's office the number one fear in the country is needles. Right. So you sitting there and somebody you know putting a needle in your arm to take out that tube of blood. Whether or not it's a tiny tube or a big tube it actually doesn't matter.

You know you had to go and park and take time off work. I just see that as a terrible problem in our society that people are afraid of needles. We should not be fearful. I don't like that at all. I feel we should solve the fear problem before we solve the needle problem.

I think if you can do and and this is, you know, something we're working on and we've talked about this. I think in the next year or two, you'll have at home diagnostic devices that you can put on your arm, click a button, you feel nothing. It's kind of like a CGM, right?

Um, and you can actually probably eventually look at the interstatial fluid. So, you're not even doing injections deep into the blood, but you're actually just doing kind of like top capillary fluids to be able to interpret what some of these base biomarkers are.

If you can pull that off and it costs 10 bucks to do that and you just click a button, take it off and mail it back to him, that I think really transforms access because so many more people I think will do that versus the whole, you know, kitten koodleoodle like going and scheduling and showing up in office. Yeah.

Yeah, that makes a lot of sense. Uh how what what's your like framework for how the GLP1 market shapes out? Yeah, it's a crazy market. You know, it's like one of the the the most important categories probably in the next few years. I think you're going to have more and more treatments on the market very quickly, right?

You've got Netera deal with with Fizer and Novo that have been taking place, you know, back and forth. Uh you've got Kylera that just raised a huge growth fund that's got a a GLP GIP that is at par or possibly superior to TZepide. You've got Viking coming out probably in 29 or 30.

You then have WGO Zmpic going generic sometime in 2030 or you know 31 which is going to bring the price down to you know it costs you know it could probably cost $10 to make one of those vials right. So, I think in the next few years the landscape is going to be um incredibly competitive.

I think the prices are going to come down dramatically. This is something we're very excited by. When we first started putting these treatments out, the prices were $1,500 a month, but now they're down to about $150.

I would guess in 3 years from now, you can be buying, you know, one of the best treatments for 50 bucks a month. Uh and at that point, it's going to be just cash pay.

customers are going to be able to use HSA, FSA, not have to deal with the, you know, the pain in the ass of insurance and then the massive market will expand pretty dramatically. Yeah. You you said you have like what thousands of square feet of compounding, something like that. Tens of thousands.

Yeah, we've got a million a million square feet. A million square feet. I feel like that's been controversial in the past. There's been uh battles between you and maybe the FDA, maybe the uh the Just a little controversial. Yeah. I mean, I've we read about it in the Wall Street Journal.

Uh, is there are you staying the path on compounding? Is that where you want to be in a decade for is it is compounding here to stay or is there a world where you wind up partnering with the the the legacy pharma companies? Uh, I think it's both, right? I think we will inevitably partner with a lot of these companies.

You know, we have the largest distribution platform for therapeutics in the US for consumers, right? So if you have a next generation treatment, we should be talking because if we want to get your medicine to a lot of people, you know, there's just no faster route to do so.

So I think that's a very logical and natural thing to happen. And we we've been doing things like this. We recently invested in Grail, which is one of the uh uh I think the most advanced early multi-cancer detections, blood test, simple blood test can detect over 100 cancers as early as stage one.

I have every single person in my family take this test every year. um more things like that are going to come to market and I think will come to the platform. But for compounding in specific, there's really clear guidelines with regard to FDA allowance of compounding. There's different types ofarmacies.

They can do different types of things for very specific reasons, provider personalization, form factor, side effect management, etc. We're a public company. You know, our our chief medical officer was a chief medical officer of Walgreens. Mhm.

Uh Deour, who's on our board, who runs the risk committee, was the woman who who wrote a lot of the compounding legislation at the FDA for a decade. So I think we play very clearly by the rules.

I think this is one of the first times in history that um we're able to give this level of personalization to a lot of people, right? Historically, this level of personalization only was possible for people that, you know, were spending $50,000 a year for concier doctors and they could have treatments made for them.

And I think it's our ambition to figure out how do you get that for the 1% to everybody. And so I think there's friction without question in that system.

But uh the regulatory framework is is is very clear and I think we're just staying the course and and I think over time we'll be able to figure out ways to to to make the other parties in the ecosystem feel like they're getting you know well well compensated uh as well. Yeah. Makes a ton of sense.

Uh how would you describe your management style?

uh the the you know the company's uh up massively from you know the IPO uh I feel like uh I started tracking him during the DTOC era right you guys were the the poster child of DTOC this meteoric rise and then and then uh obviously uh you know the the public markets have been uh wild uh yeah I'm curious like how how you navigate uh you know the the market internally you know even with the team right it feels like you guys very built for it.

Um, but what's your approach? Yeah, you know, when we I remember waking up one morning and and looking at my wife and the stock was $287. Like we were trading at I think like 0. 4 times next year's revenue or something like that. It was it was crazy. So, I think the team has a stomach of steel.

you know, whether the stock's $70 or $287, I think, you know, most of the executive team will retire with this company, including myself, because I think there's this incredible opportunity to figure out how you redefine what is a healthcare membership that every single one of us wants to buy.

Like, it's got the cutting edge. It has the most, you know, the best diagnostics. It's the most affordable. It's an Amazon Prime version of healthcare that you can afford, right? It's like 500 bucks a year. for 500 bucks a year.

Why deal with insurance in this country when everybody's insured, but everybody has a high deductible plan with a $2,000 deductible, right? So, while everyone is insured, nobody can actually get the benefits of insurance because they can't actually afford to use all the cash to then get the $1 of insurance.

So, I think our management team is um it's not a very glitz and glamour team, right? Like, you're not seeing us out on TV 24/7. It's a really heads down team. Uh it's a gritty team. It's a team that loves to build. We have a ton of fun together.

Uh and I [clears throat] think it's a team that genuinely focuses on what can be accomplished in a decade uh and not can be accomplished in the next quarter or two, which is why I think a lot of the investments we're making have a much longer time horizon, but you know, as a as a founder that runs the company that has the high load stock, like we have that privilege to be able to invest over that long period of a time.

That makes sense. Uh what kind of horror stories have you heard about Chinese peptides? There's sort of a meme going on on X of of people talking about it. Uh obviously there uh some of the pricing coming out, you know, people buying directly there is pretty wild.

Uh what what are the what are the risks that people should be aware of? Yeah, you you've got to make sure you know the the pharmacy suppliers you're working with are good quality pharmacy suppliers.

There's something called a certificate of analysis that um you know high quality FDA oversight facilities in the US uh can deliver third-party tested and validation. You can actually ask for this certificate.

We give customers their certificate for for any of our compounded products which actually shows the independent laboratories saying this is exactly what you know we say it is.

Um, so I think you want to have organizations or orarmacies that have that type of coverage, that type of third party testing, you know, good manufacturing practices. Um, and ideally have some type of oversight from, you know, state boards or or FDA.

I think there's a lot of stuff you can buy online that's, you know, truly not for human use. And and they say that as a way to kind of loophole around, but it like truly is not for human use. And, uh, you know, I would encourage people to to try to stay away from that kind of stuff. Um, random question.

I'm curious to get your take on it. Something like 1% of US GDP is is dialysis. uh doesn't necessarily seem like a problem for him to solve. But from everything you know about, you know, working uh in in uh in and around uh this industry, how do you think uh do you think it's a solvable problem or is it just Yeah.

You know, my grandfather was on diialysis for like the this five or seven years before he died. And it's a it's like the worst thing in the world like watching somebody on that, right? you have to show up to the facility every week. If you don't, you literally your body deteriorates and you die.

Um, dialysis is a result of you having totally failed taking action on you being sick for 20 plus years, like a very long time. Sim similar to cardiovascular disease, right? Like you show up in the ER um at 60, you have a heart attack, you know, that took 20 years to build up. Like there's just no other way it happens.

And so something like what we launched today I actually think is the first step of the solve um because you get for a couple hundred bucks something like a lipoprotein little a test which tells you your predisposition for advanced cardiovascular disease which means even if your cholesterol numbers are amazing they're not amazing enough right you have to have like the best gold standard cholesterol numbers like you're an 11-year-old kid to avoid a heart attack because you have this predisposition to risk same thing with diabetes right?

Diabetes, A1C, fasting insulin, all of the or fasting glucose, these all rise over time. So, if we're 30 or 35 and have these numbers, you can just chart what it's going to look like at 50.

And so, you know, micro steps in health, in food, uh, in movement, in, you know, metformin at the right time or GLPs or preventative statins or PSK9 inhibitors, like all of these tools exist and for the most part, these tools are not extremely expensive, right?

So the real burden in the US healthcare system isn't actually lack of innovation. It's lack of education and access. So how do you get more people tested faster? How do you make it easy and less scary for them to take that first step and then keep them motivated along the way?

Because you know these treatments don't make you feel amazing the next day, but they'll save your life 20 years from now.

And I think that's where a brand like ours spends a shitload of time is is you you actually have to love him and hers because staying on this medicine is is good for your health and uh and it's hard because you drop that habit and then you drop that benefit. It makes a lot of sense. Well, thank you so much for joining.

Uh it's great uh great to finally meet. Uh certainly were were an inspiration during uh again that DOC era. It was like just a crazy crazy moment in uh in time and it's awesome to see you guys execute in the public markets. Yeah, congrats. Thank you guys. We'll talk to you soon. Have a good one.

Uh before we move on, let me tell you about linear. Linear is a purpose-built tool for planning and building products. Meet the system for modern software development. Streamline issues, projects, and product road maps. Uh we have our next guest in the studio, Melissa Tok, Tokmack from Netic.

Uh we also the market is selling off like crazy. People are asking us to cover it, but we will talk to Melissa first. How are you doing? Hello. Good to see you. Have a seat right there.

Uh we do [laughter] need to cover uh I'm glad we have you on the show because uh the market is in turmoil uh but your business is maybe less indexed to the market. Is that correct? Uh that is correct. Explain explain uh you know [laughter] uh explain uh the business the news.

Take us through it and then we'll we'll get your take on all sorts of things. Well, I mean, we serve the essential services businesses that are really backbone of our American economy by nature. Counter. Let's give it up for the backbone. The backbone of the American economy. Thank you. Okay.

So, these businesses are these enterprises are in industries like HVAC, plumbing, electric, solar, consumer health, um energy across the boards. Um so whether the market is going down or up that somebody a business or a consumer always needs these businesses.

Actually today I'm coming from San Francisco as you know all of San Francisco needs a lot of these services today because the weather is a complete disaster. Uh it has been raining. No complete rain. Everything is shut down. Yeah.

Electricity goes off all the time and I'm sure a lot in the Bay Area will be needing these services all day today. So what we do is provide really these enterprises with an AI revenue engine, right?

So in these times of need, they can actually handle all of the demand with AI agents and serve the communities, but also when the demand is soft, they can predict the need and turn these relationships into multi-time recurring relationships. Okay.

Uh, so I I feel like every time I call a plumber or a roofer or an electrician, people like that, they don't like the delay and the lag of getting like there's always like crazy lag in terms of getting back and just being like, "Yes, I can see I can come by at this time.

" And I feel like the lag is because they're super busy. Yeah. And if you can help them respond more quickly, they can generate a lot more. Exactly. Actually, many of them are very large businesses and the lag is because everybody needs it.

When you need it, odds are millions of other people need it at the same time and I'm sure like