Hims & Hers Bets Big on Infrastructure with $200 Million Expansion

Hims & Hers US4330001060

The telehealth company Hims & Hers Health is making a major strategic pivot, committing $200 million to construct a new, integrated fulfillment and pharmacy complex in New Albany, Ohio. This substantial investment in proprietary infrastructure follows the abrupt collapse of a partnership with Novo Nordisk in June, signaling a decisive move toward greater operational independence.

This new facility is more than a warehouse; it is designed to consolidate laboratory testing, pharmacy operations, and order fulfillment under one roof. The company expects it to create approximately 400 new jobs. A primary goal is to alleviate supply constraints that have occasionally hampered growth, particularly for high-demand GLP-1 weight-loss medications and personalized wellness products.

The Ohio complex represents just one pillar of a broader vertical integration strategy. In early December, Hims & Hers entered the Canadian market by acquiring the platform Livewell. Simultaneously, it purchased YourBio Health, a company specializing in painless blood collection technology. These moves are systematically reducing the firm's reliance on external partners and building an end-to-end service model.

Financial Performance Reflects Strategic Shift

The aggressive expansion comes at a measurable cost. For the third quarter of 2025, Hims & Hers reported revenue of $599 million, a robust 49% year-over-year increase. However, its gross margin contracted to 74%, down from prior levels in the high 70-percent range. Analysts attribute this pressure to two factors: a product mix increasingly weighted toward lower-margin prescription weight-loss drugs and the significant upfront capital expenditures required for physical infrastructure.

The terminated deal with Novo Nordisk in June forced the company to accelerate its own supply chain for semaglutide and authorized generic versions far more rapidly than originally intended. While pressuring margins in the short term, this push is intended to secure long-term control and reduce dependency on large pharmaceutical manufacturers.

Market Analysts Focus on Scale and Subscribers

Despite margin concerns, the company's subscriber base continues to expand, now exceeding 2.4 million members. This scale is catching the attention of market experts. Barclays recently assigned an "Overweight" rating to the stock with a $48 price target, highlighting Hims & Hers' ability to capture market share in the fragmented weight-loss medication sector.

The critical test will be whether these heavy investments translate into improved operational efficiency and sustained growth. The upcoming release of Q4 2025 financial results in February will provide the first significant data on whether this $200 million offensive is paying off.