Hims
&
Hers
is
making
a
major
global
expansion
with
its
planned
acquisition
of
Australian
digital
health
company
Eucalyptus,
a
good
move
for
the
company
as
it
faces
regulatory
and
legal
challenges
in
the
U.S.
over
its
sale
of
compounded
GLP-1s,
experts
say.
San
Francisco-based
Hims
&
Hers
is
a
direct-to-consumer
health
and
wellness
platform
that
provides
support
for
sexual
health,
weight
loss,
hair,
skin,
primary
care,
mental
health
and
other
areas.
Eucalyptus,
meanwhile,
runs
consumer-focused
virtual
clinics
and
brands,
including
weight
loss
platform
Juniper,
men’s
health
program
Pilot
and
fertility
and
reproductive
care
platform
Kin.
The
deal,
which
was
announced
Thursday,
is
valued
at
about
$1.15
billion,
with
$240
million
in
cash
at
closing
and
the
rest
paid
as
deferred
and
performance-based
earnouts
through
early
2029.
The
acquisition
expands
Hims
&
Hers
into
Australia
and
Japan,
while
deepening
its
presence
in
the
U.K.,
Germany
and
Canada.
Eucalyptus
has
served
about
775,000
customers.
This
is
a
smart
deal
for
Hims
&
Hers,
according
to
Michael
Abrams,
managing
partner
of
Numerof
&
Associates.
The
companies
are
highly
complementary
as
they
both
provide
services
that
include
men’s
health,
women’s
health,
weight
health
and
dermatology.
They
also
both
share
a
mission
of
expanding
personalized,
consumer-focused
healthcare.
In
addition,
the
acquisition
sets
up
Hims
&
Hers
for
global
expansion
while
also
diversifying
its
customer
and
revenue
base,
he
added.
“It
seems
clear
that
a
prime
consideration
in
Hims
&
Hers’
acquisition
is
to
pivot
from
a
predominantly
U.S.-centric
telehealth
and
DTC
care
model
to
a
global
consumer
health
platform,”
Abrams
told
MedCity
News.
“Strategically,
the
Eucalyptus
acquisition
gives
Hims
&
Hers
geographic
diversification
away
from
its
core
U.S.
markets
—
a
move
likely
designed
in
part
to
de-risk
revenue
concentration
and
broaden
patient
bases.”
This
is
especially
desirable
for
Hims
&
Hers
as
it
faces
a
high-profile
lawsuit
from
Novo
Nordisk
over
the
company’s
compounded
versions
of
GLP-1s,
which
are
custom-made
and
include
the
same
active
ingredient
found
in
branded
GLP-1s
like
Wegovy,
Abrams
said.
They’re
not
FDA-approved,
and
many
(including
Novo
Nordisk)
argue
they
are
unsafe.
The
lawsuit
and
scrutiny
Hims
&
Hers
is
experiencing
over
the
selling
of
these
drugs
has
put
pressure
on
the
company’s
stock
and
highlights
“the
risks
of
its
U.S.
pharmacy-centric
model,”
Abrams
noted.
Another
healthcare
expert
said
he
is
“cautiously
optimistic”
about
the
deal,
noting
that
Hims
&
Hers
is
trading
down
due
to
the
crackdown
on
GLP-1
compounding
and
the
legal
issues
with
Novo
Nordisk.
“International
expansion
in
existing
product
categories
will
diversify
revenue
and
provide
new
pipelines
for
innovation,”
said
Warren
Templeton,
managing
director
at
Health2047.
“A
big
unknown
is
how
much
GLP-1s
are
a
revenue
driver
for
Eucalyptus,
and
whether
similar
legal
and
regulatory
challenges
already
announced
may
put
downward
pressure
on
the
[over-the-counter]
grey
market.
That
said,
the
deal
structure
seems
to
acknowledge
this
with
earnouts
and
deferred
payments.”
Beth
Mosier,
healthcare
M&A
director
at
West
Monroe,
meanwhile,
stated
that
Hims
&
Hers’
acquisition
of
Eucalyptus
“signals
continued
expansion
across
weight
loss,
anti-aging,
mental
health,
and
wellness
by
extending
affordable,
personalized,
and
convenient
healthcare
to
consumers
worldwide
who
are
increasingly
seeking
accessible
alternatives
to
traditional
care
models.”
The
deal
is
expected
to
close
in
the
middle
of
2026.
Photo:
designer491,
Getty
Images