Josh Nathan-Kazis

As Hims & Hers Health adjusts to the end of the knockoff weight-loss-drug bonanza, the online drug retailer reached a deal to expand its reach into Europe.

Hims said early Tuesday that it had agreed to buy a private European telehealth company called Zava, which operates in the U.K., Germany, France, and Ireland.

Like Hims, Zava offers prescriptions and medicines online, and sells drugs such as generic treatments for erectile dysfunction and hair loss. Hims did not say how much it would pay for Zava.

The deal comes at a challenging moment for Hims, which saw its market value climb to more than $15 billion at its peak in February from less than $2 billion in early 2024, amid excitement about its ability to sell cheap, legal copycat versions of Novo Nordisk's GLP-1 weight loss shot Wegovy.

Since late May, the Food and Drug Administration has banned compounding pharmacies from making the knockoff Wegovy. With its ability to sell the knockoff drugs now ended, Hims is looking elsewhere for growth.

Hims shares were up 14.7% on Tuesday morning, and the stock is up more than 170% this year.

Zava has operated since 2011, and raised $32 million in funding in 2019. Hims said that Zava has 1.3 million active customers, roughly half the 2.4 million subscribers that Hims said it had as of March 31.

The acquisition will allow Hims to expand its operations into European markets as the weight-loss market in the U.S. shrinks, but analysts raised concerns about the deal early Tuesday.

"Expanding internationally while the U.S. business slows is a risk and may reflect product saturation and rising competition in the U.S. markets," Bank of America analyst Allen Lutz wrote on Tuesday morning.

Analysts also warned that similar companies have run into trouble expanding into Europe, due to the vastly different regulatory environments. "There is a long history of [healthcare services] EU deals gone wrong," Leerink Partners analyst Michael Cherny wrote Tuesday.

Hims says it plans to use the Zava platform to launch Hims-branded offerings in the countries where Zava operates. Hims already has operations in the U.K., but says it will expand activities there.

Hims has maintained aggressive revenue targets even as the compounding era has ended. The company says it expects 2025 revenue of $2.3 billion to $2.4 billion, up from $1.5 billion last year.

Hims announced a deal with Novo in late April that allows it to sell branded Wegovy at a discount to the drug's list price. Hims is only one of a number of competing online pharmacies now selling branded Wegovy, including Novo's in-house NovoCare pharmacy. What's more, Hims' price for branded Wegovy is higher than its competitors.

Hims has ambitious plans to offer more-personalized treatments, incorporating compounding and lab tests. Adding an international expansion to the docket could be one layer of complexity too many.

"HIMS' U.S. business is contending with a number of moving parts including a slowing base business and the loss of compounding/launch of its branded GLP-1 offering," Leerink's Cherny wrote. "Adding in a multinational, European digital health platform increases HIMS' TAM, but also increases the complexity of the business."

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

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June 03, 2025 11:03 ET (15:03 GMT)

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