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Hims & Hers spent millions ramping up its weight-loss business. Now it’s losing access to its best drug.

The rapid rise of GLP-1 weight-loss drugs has come with a raucous side show—a wave of copycat drugs unbound by drug patents. The knockoff surge was led by Hims & Hers Health, the telehealth firm that began selling the drugs last spring.

Cheap, compounded versions of the weight-loss drugs have been a cottage industry for a few years, but it was the arrival of Hims, a multibillion-dollar public company, that brought the knockoff medicines into the mainstream. Hims stock soared in the months that followed, while the GLP-1 patent holders, Eli Lilly and Novo Nordisk, saw their stocks come under significant pressure.

Now the whole shake-up is coming to an end, even quicker than it began. And Hims shareholders could be left in an unhealthy state.

U.S. drug laws allowed compounding pharmacies to manufacture semaglutide and tirzepatide, the GLP-1 drugs sold by Novo Nordisk and Eli Lilly, as long as they were considered to be in shortage. The Food and Drug Administration recently declared an end to the shortages, though, meaning the compounding pharmacies need to stop making the drugs in bulk.

The abrupt end to the copycat business isn’t a surprise; the GLP-1 shortages were always bound to end. But in the interim, Hims & Hers spent untold millions ramping up its weight-loss business, mounting a marketing blitz that culminated with a minute-long Super Bowl ad in February.

Now that the products are on their way out, Hims & Hers faces a dilemma—justifying a stock price that soared on the massive opportunity in weight loss. Shares peaked near $73 in February. Today, Hims stock is trading around $41, with a market value of roughly $9 billion.

Before the company’s pivot to weight loss, shares of Hims traded around $15, for a market value of $3.1 billion. Without the ability to sell compounded semaglutide in bulk, those $6 billion in market value gains are at risk, as the company is forced to look elsewhere for growth, including older weight-loss treatments.

Hims says it still expects overall weight-loss sales of “at least $725 million” in 2025, or 30% of its overall projected revenue. The company wouldn’t say what that same figure was in 2024. What it has said is that GLP-1 sales were $225 million last year. Most of that amount seems likely to go away in 2025 with the shortages ending.

Hims executives had repeatedly said the company would sell personalized doses of GLP-1 drugs to a large number of patients after the shortages ended, an exception allowed under laws that regulate compounding.

In late February, though, Hims and Hers seemed to describe that opportunity as far smaller. “Personalized semaglutide dosages will supplement these core offerings for the subset of consumers for whom it is a clinical necessity,” Chief Financial Officer Yemi Okupe said on the company’s Feb. 24 earnings call. Shares fell 22.3% the following day.

A Hims’ spokesperson didn’t directly address questions about the change in strategy, instead directing Barron’s to a post from CEO Andrew Dudum about the company’s opportunity in personalized medicine.

On the call, Okupe said Hims’ “steady state weight-loss offering” would be “primarily composed” of generic weight-loss pills—not GLP-1 medicines—along with a generic version of an older GLP-1 injection called liraglutide, which it hopes to launch later this year.

In other words, the company plans to accelerate its weight-loss sales with less-effective drugs. That could prove challenging.

A company spokesperson told Barron’s that continued difficulty in getting GLP-1 drugs could make Hims’ treatments necessary for some patients.

Beyond that, Okupe has said Hims’ weight-loss consumers “value the benefits the platform brings beyond the medication.”

Hims is playing the long game. “Our capabilities allow us to be a leader today, while ongoing investments will position us to serve millions more Americans once semaglutide is off-patent in the coming years,” the spokesperson said. Novo Nordisk expects its Wegovy patent to expire in 2032.

Hims has reason to stay focused on weight loss. It has spent heavily on the opportunity. It paid an estimated $16 million for the Super Bowl ad that seemed targeted squarely at Robert F. Kennedy Jr., the new secretary of the Department of Health and Human Services, casting its cheaper GLP-1 weight loss offering as a Trump-era answer to high healthcare costs.

Hims’ overall marketing costs were up sharply in 2024, to $678.8 million from $446.6 million, while its total operating expenses climbed nearly 50% to $1.1 billion. The company also bought an FDA-regulated compounding pharmacy in the fall, called MedisourceRx, for an undisclosed sum.

Lilly and Novo, meanwhile, are targeting the weight-loss customers that have used Hims and other telehealth firms. In new ads, Lilly and Novo both call out compounded treatments as unproven. This past week, Novo also launched a new website selling Wegovy directly to cash-paying customers for well below the drug’s list price. Lilly has a similar offer for Zepbound. Meanwhile, insurance coverage for both drugs is expanding, further reducing the out-of-pocket cost for many patients.

Aside from the GLP-1 mess, Hims’ core business selling generic treatments for hair loss, erectile dysfunction, and other conditions looks healthy. Excluding GLP-1 sales, its revenue was up 43% in 2024 to $1.2 billion, and the semaglutide surge has likely grown the company’s brand recognition.

But at the recent price of $41, investors are pricing in much more than the core business. Wall Street expects Hims to grow earnings 9% this year to 58 cents a share, according to FactSet, giving the stock a price-to-earnings ratio of 70 times. It’s a pricey bet built on very optimistic scenarios.

If the weight-loss business slows, Hims investors could be left with a much slimmer stock.

Donald Trump is eager to flex U.S. hydrocarbon muscle, and mitigate trade deficits, by selling more liquefied natural gas. Beleaguered trading partners are happy to oblige, on paper. Both Japanese Prime Minister Shigeru Ishiba and European Commission President Ursula von der Leyen have promised to buy more.

Details promise to be devilish, however. The day he took office, the U.S. president canceled Joe Biden’s moratorium on permitting new LNG export terminals. That unleashes more than a dozen pending projects, which could double U.S. export capacity by 2028, according to Washington’s Energy Information Administration.

Such an investment flood, combined with a similar surge in the Persian Gulf petrostate Qatar, could tank the market, though. “We expect gas prices to fall in the coming years,” says Jacob Mandel, research lead at Aurora Energy Research.

Investors expressed their own queasiness in response to the initial public offering of Venture Global, which came three days after Trump’s inauguration. The company, which has two huge LNG projects in progress in Louisiana, lowered its target price by 40%. The stock has fallen another 40% in six weeks.

In market terms, the Trump administration is also talking to the wrong customers. Europe has been the top purchaser of U.S. LNG since Vladimir Putin cut off its Russian gas in 2022, gobbling more than 40% last year. But its appetite has probably peaked as it accelerates renewable energy and probably scales down energy-intensive industries like steel and fertilizers. “It’s hard to imagine a situation where Europe will need more LNG,” Mandel says.

Japan’s LNG demand already shrank more than 20% in the past decade and should fall further as population declines and Tokyo shifts back toward nuclear power, says Anne-Sophie Corbeau, a scholar at Columbia’s Center on Energy Policy.

Global demand growth depends on faster-growing Asian economies. “There’s a pervasive belief that India and Southeast Asia will come to the LNG market’s rescue,” says Clark Williams-Derry, energy finance analyst at the Institute for Energy Economics and Financial Analysis.

The mature markets can still play a role in U.S. LNG expansion, since producers generally pre-book most of their expected output through long-term contracts. European or Japanese utilities could step in as off-takers, then resell gas they don’t need on spot markets, explains Joseph Majkut, director of the energy security and climate change program at the Center for Strategic and International Studies. “They create a hedge for themselves that increases energy security,” he says.

Japan looks particularly keen on this trade, as its conglomerates can sell infrastructure along with excess gas to emerging LNG markets, Williams-Derry says. “Companies in Japan are becoming LNG pushers, looking to make money on the re-gasification terminals and pipelines, too,” he says.

Other Trump policy priorities could conflict with his LNG salesmanship. Tariffs on imported steel and aluminum will probably raise construction costs, Mandel says.

Lifting economic sanctions on Russia, which the Trump administration has dangled as part of a peace settlement in Ukraine, could shift markets more dramatically—unlocking Moscow’s own LNG expansion and possibly renewing flows of cheaper pipeline gas into Europe. “Russia has become one of the biggest questions again,” Corbeau observes.

In the long run, liquefied natural gas still looks like an expanding industry that the U.S. is well positioned to dominate. Global demand should increase by half by 2040, predicts industry consultant Wood Mackenzie. That may not be fast enough for an impatient president.

Alternative investments aren’t so “alternative” anymore. Once the rarefied domain of institutional investors and some sophisticated individuals, alts—from hedge funds to private credit to cryptocurrency—have increasingly pushed their way into the investment portfolios of wealthy people. They’re now hitting the mass market, too.

Alternative investments aren’t so “alternative” anymore. Once the rarefied domain of institutional investors and some sophisticated individuals, alts—from hedge funds to private credit to cryptocurrency—have increasingly pushed their way into the investment portfolios of wealthy people. They’re now hitting the mass market, too.

In a sign of their growing popularity, global alternative assets under management are expected to jump to $29.2 trillion by 2029, up 74% from $16.8 trillion at the end of 2023, according to research firm Preqin. Meanwhile, nine out of 10 financial advisors now use alts in client portfolios, and half of advisors allocate more than 10% of client portfolios to the category, according to a recent survey by alternatives-investing platform CAIS and consulting firm Mercer.

Little wonder, then, that alts have become a big theme among advisors in the latest Barron’s Top 1,200 ranking. This listing, which ranks the top advisors in each of the 50 states and the District of Columbia, is the largest of Barron’s four annual rankings of advisors. The group of 1,200 is both a handy place to find an advisor and an excellent barometer of industry trends.

The argument for alternatives is that they diversify portfolios—lowering overall risk—and offer the potential for juicy gains. If publicly traded stocks and bonds are the steak and potatoes of investment accounts, think of alternatives as the chimichurri.

“If we can get our client families to accept the illiquidity that comes with private investments, we can unlock investment themes that they haven’t been exposed to if they’ve been a typical retail investor with a 60/40 portfolio,” says Charlie Maxwell, co-chairman of Cresset, referring to the traditional investment allocation of 60% stocks and 40% bonds. Maxwell is No. 1 in Arizona in this year’s Top 1,200 financial advisors ranking.

Yet alts aren’t for every portfolio, particularly those geared toward the middle class, financial advisors say. And investors need to bring a discriminating eye to these investments. “Just because there is increased supply and demand doesn’t mean alternatives are right for all investors, and it doesn’t mean that all hedge funds or private-equity funds or real estate funds are created equal,” says Christopher Toomey, a private wealth advisor at Morgan Stanley Private Wealth Management.

To make good decisions about alternatives, investors should understand where alts could fit in their portfolios, what the risks are, and what benefits they bring in return for often high fees.

Technically, an alternative investment is any asset class you add to a stock and bond portfolio with the expectation that it might have higher returns than, and won’t correlate with, your foundational assets. Many alternative investments are funds made up of “private” investments—they aren’t publicly traded stocks or bonds, and they are largely outside the purview of regulators. Alternative funds may have complicated strategies and only be suitable for wealthy investors. Thus, asset managers typically offer them through financial advisors who can explain the details to clients.

There is nothing new about alternative investments. Generations upon generations have invested in real estate. Hedge funds and private equity were the rage in the 1980s and remain large parts of the alts landscape. Private credit gained traction after the 2008 financial crisis, when traditional banks were forced to reduce risky lending, and it has exploded since then. Many investors consider art, collectibles, and fine wine to be alts. And some are embracing cryptocurrency.

Alts historically have been reserved for investors who can afford to lock up big chunks of their wealth for long stretches. Hedge fund minimums can range from $100,000 to several million dollars, and investors may not be able to easily withdraw their funds for a year or more. The underlying securities are often illiquid (think how long it takes for a real estate transaction to close), so fund managers don’t let investors pull all their money out at once.

Then there are the fees: A private-credit fund might charge 1% to 2% of assets under management. On top of that, many alt funds often charge performance fees that can range from 10% to 20% of profits above a certain threshold of gains.

Among alts, private credit is having a moment. The market for lending outside the traditional banking system was estimated at about $1.5 trillion at the start of last year, up from $1 trillion in 2020, and is projected to grow to $2.6 trillion by 2029, according to Morgan Stanley.

“We’re seeing a lot of demand within private credit, particularly because you’re in an environment where interest rates are at elevated levels,” says Toomey. “If you look at traditional fixed income, spreads are relatively tight [meaning that corporate bonds aren’t yielding much more than Treasuries, which are less risky], while in the private-credit world, you can see low-double-digit type returns.” Those hefty returns are in contrast to traditional bonds, which currently have negative three-year returns.

Nucleus Advisors has more than one-third of its $3 billion of assets in alts, including much of its partners’ money. The New York–based firm currently owns “substantial amounts” of private credit in client portfolios but avoids large private-credit funds, says Jordan Waxman, founder and managing partner. “We focus on managers who are a little smaller, nimbler, and focused on senior secured credits,” says Waxman. “Typically these managers employ low-to-moderate leverage, and they generate income in a 10% to 12% range.”

On the hedge fund front, Waxman likes global macro funds, which can offer stock-like returns with low correlations to the stock market. Most of the best are closed to new money, but when they periodically open, Nucleus pounces. Waxman also likes royalties—investments that involve prepaying for a revenue stream from music, mining, or pharmaceuticals, for instance.

Morgan Stanley’s Toomey sees promise in funding the infrastructure needed to support the booming artificial-intelligence field. In addition, he points to opportunity in the private-investment secondary market, where many funds are in need of cash to pay out to their shareholders. “We’re hearing that this is a great time to be buying assets,” Toomey says.

Bitcoin and other cryptocurrencies have gradually gained acceptance among mainstream investors and financial advisors, although plenty of skepticism remains. The $3 trillion global cryptocurrency market is dominated by Bitcoin, with a more than 50% market share. Crypto famously holds the promise of big returns at the cost of wild volatility.

But Matthew Hougan, chief investment officer of Bitwise Asset Management in San Francisco, says that over crypto’s 15-year history, small allocations have boosted portfolios’ risk-adjusted returns if held at least three years and rebalanced as needed. “It isn’t for every investor, but for many investors with a long time horizon, allocating 1% to 5% to crypto can make a lot of sense,” he says.

Nucleus has been investing in the crypto space for about five years, but more in blockchain technology than cryptocurrency, says Waxman. “Crypto as a category is very interesting from the venture capital point of view,” he says. “There’s seed investing that’s also very interesting.”

Terms like “hedge funds” and “private equity” may conjure visions of outsize profits, but Waxman says alternative investments serve a dual role in his clients’ portfolios: “We are a big believer that you can get excellent returns and lower your overall portfolio risk if you find really good alternatives.”

Uncovering those gems means being clear-eyed about the risks. Management with a proven record is a must. And different assets carry different kinds of risks. Geopolitical events can affect commodities, regulation can impact crypto, and interest rates can affect real estate, for instance.

Although the payoff for taking those risks can be attractive, not everyone needs alts in their portfolio, says Matthew Somberg, owner of Gottfried & Somberg Wealth Management in Glastonbury, Conn. “Most retail investors, if they’re trying to achieve mid- to high-single digit returns, will be able to accomplish their goals through a traditional 60/40 periodically rebalanced portfolio,” he says. “And I don’t know that there’s a huge need for the person who has $1 million or $2 million in their investment portfolio to carve out a significant allocation to alternatives.”

Nonetheless, asset managers are coming for the mass market.

Liquid alternative investments are mutual funds or exchange-traded funds that provide exposure to alternative strategies but are relatively inexpensive, can be traded daily, and carry low investment minimums. Several ETFs have recently been proposed to or approved by the Securities and Exchange Commission to give retail investors access to private equity, private credit, and hedge fund–like strategies. The SPDR SSGA Apollo IG Public & Private Credit ETF (ticker: PRIV), which launched in late February, features a private-credit allocation as high as 35%. The Pacer PE/VC ETF (PEVC), launched in early February, provides exposure to private equity and venture capital investments.

Although alt-flavored ETFs allow more investors to participate in previously exclusive markets, some financial advisors are skeptical about whether they can deliver the benefits of alts without the sacrifices—high fees, lockup periods, and gates on exits—required by most traditional alts.

But so-called liquid alternatives can also make sense for wealthy investors. Somberg uses them for easier diversification since they’re easier to buy and sell. “Rebalancing a portfolio is very important, and if you own something that isn’t liquid, it can make rebalancing the rest of the portfolio more complicated,” he says.

Investor interest in alts tends to surge when markets get choppy, says Sean Connor, president and CEO of global private wealth at Blue Owl Capital, a leading alternative-asset manager. “We have noticed that every time there’s a big selloff with high correlation and lots of volatility, we tend to see a pretty meaningful increase in interest in what we do,” says Connor.

If volatile markets do lie ahead, as many investing pros believe, and alts prove to have added value to portfolios, these funds should win new investors, Connor reasons. “It’s easier to prove your value” during such times rather than “when the markets are just up and to the right,” he says.

Don’t invest in alternatives just because your neighbor does. As with any investment, you should know whether and why they should be part of your portfolio, says Toomey. “I think a lot of times there is a sensationalism about investing in alternative asset classes,” he says, “and the investors don’t really understand how it fits within their overall investment plan.”

Connor encourages investors to ask their investment advisor about negative scenarios. “I think the first question you should ask about any investment is: What’s the worst that can happen?” he says. “How low can it go?”

Anyone recommending alts for your portfolio should be able to explain their specific benefits and risks, and how they align with your financial goals and risk tolerance. They should provide clear reports about the investment’s performance and fees.

Financial advisors such as Somberg say they are more likely to trust established managers that run larger funds. “I’m going to be more comfortable using a really well-known manager than some firm I’ve never heard of that is creating a private-credit fund,” he says. “If I saw something out there from a smaller firm that was offering 12% or 13% or 14%, I would get a little nervous.”

Alternative investments are catching on as investors learn about their potential to provide diversification and boost returns. But don’t just jump on the bandwagon. Which alts you buy, if any, depends on your unique situation and goals. As with any investment, making careful, informed choices is a must.

Stephen Schwarzman and Larry Fink are increasingly all up in each other’s business. Just look at BlackRock’s new Panama Canal deal.