Shares in telehealth business Hims & Hers Health (HIMS) dropped over 6% today after reports that it and peers are marketing hair-loss treatments to young men without adequately flagging up some alarming side-effects.
Serious Symptoms
According to a report in the Wall Street Journal, men in their 20s and 30s worried about thinning hairlines are responding to persuasive adverts on social media platforms such as Instagram for a treatment called Finasteride. The report cited one man who completed a 14-question intake on Hims.com and received a bottle of finasteride pills days later. However, after taking the medicine he experienced weird symptoms including anxiety, dizziness and even his genitals changing shape. Other side effects of the treatment, which has been around now for 30 years, include sexual dysfunction and depression.
It appears that telehealth companies are not required to disclose side effects and other risks in their ads – unlike drugmakers. Instead, telehealth companies say they disclose side effects and other risks on their websites.
Hims Defends Policy
Hims told the Journal that its customers “go through a comprehensive intake that is reviewed by a licensed provider who makes a clinical determination about the patient’s eligibility for medication,”. The company communicates transparently with patients “about all essential details and safety information” and customers can ask clinicians about side effects.
Many men take Finasteride well and find it an effective treatment. According to the Journal around 4% of patients experience side effects. That is low but still 4 in every 100 people.
The publicity could impact sales of the treatment for Hims & Hers. One doctor told the Journal that it is a treatment that young men should not take. It could also highlight issues around safety messaging, regulations for telehealth firms and potentially restrictions on social media advertising. That will be a blow to Hims & Hers whose stock has jumped by 31% in the year-to-date.
Is HIMS a Good Stock to Buy Now?
On TipRanks, HIMS has a Hold consensus based on 5 Buy, 6 Hold and 2 Sell ratings. Its highest price target is $85. HIMS stock’s consensus price target is $45.85 implying an 44.50% upside.
