To The Moon

$Hims & Hers Health Inc.(HIMS)$ ( ▲ 6.03% ) has a lot of the characteristics of a winner in the pre-AI tech paradigm. The company can be an aggregator of demand and leverage scale on a global level to disrupt a multi-trillion-dollar market.

But AI business models aren’t likely to replicate the business models that won over the last 20 years.

The biggest problem I see is that AI companies continuously disrupt each other with no sustainable differentiation or feedback loop that keeps a company ahead for long. Anthropic takes a lead in coding in January, OpenAI takes it back in July, and Grok may be the winner by September.

That’s made it difficult for me to see/invest in “AI winners.” What does it mean to win the next 6 months if you lose your edge after that? And where is the value in software if AI labs are eating the software world?

That said, there will be business models that the big AI labs can’t reach. Areas where AI itself isn’t the business model, it’s an accelerant to a differentiated model that can leverage AI.

I think healthcare is the most obvious of those areas of opportunity today. Data is very difficult to get in healthcare (because of HIPAA), and there’s a tremendous amount of financial and reputational momentum behind incumbents.

Any company that could make inroads in healthcare at scale could begin a data feedback loop that would be a differentiator in an AI world and create leverage to both improve care and expand the scale of the operation. This could be the Netflix or Amazon of healthcare.

And Hims & Hers CEO Andrew Dudum has a vision of what that future looks like and why Hims & Hers will be the big winner, leveraging AI to build a moat in health.

Data Is the Key

Note: Today’s article is largely based on Dudum’s CNBC interview, which you can watch here and listen to in full here.

When we talk about data in AI, we’re often talking about search data, articles, and old books with the binding torn off. AI needs to ingest information to become “smarter”.

When I think about AI in medicine, it’s less about learning something and more about understanding you better.

Just think about all of the information (data) you generate each day about your health:

• Heart rate

• Sleep duration and quality

• Food you eat

• Exercise

• Stress level

And on and on. There’s data everywhere.

If you wear a smart watch (like an Asymmetric Portfolio company Garmin watch) you may be collecting some of this data, but then what?

I also have a smart scale (again, a Garmin), but where does that weight, muscle mass, bone density, etc., data go?

And here’s where Dudum’s comments showed how holistically he’s thinking about data, AI, and health. In the interview, he mentions a Bluetooth-enabled bottle that records when you did/didn’t take a medication.

On top of this ongoing data, there’s genetic data and lab data that can be recorded and tracked over time. Hims & Hers is doing this with their Labs product, and the company offers Galleri cancer screening by Grail.

I wouldn’t be surprised if 10 years from now it’s standard to do a battery of labs every 6-12 months just to track all of your health signals from testosterone to heart disease to cancer.

There’s more data than ever, and more is coming. Hims & Hers wants to be the place to collect that data and use it to proactively be healthier.

Data Aggregation Layer & Becoming Proactive

There’s lots of data in healthcare and more coming.

There are also lots of healthcare solutions, whether we’re talking about prescription or lifestyle, and more are coming.

But what’s the central repository?

What’s the health “brain”?

Hims & Hers wants to play that role with AI as the frontline, always-on assistant at your fingertips.

Bad night's sleep? The AI proactively reminds you to get to bed early the next day.

Put on a few pounds over Christmas? A recipe and workout plan are on their way.

Or maybe it’s proactive recommendations based on your genome. Dudum’s father died young from cancer, in part because doctors didn’t/wouldn’t do a high-cost test because of his young age. With the right data, testing could even be personalized based on your risk factors.

Of course, a doctor is behind the scenes answering questions that need medical expertise. But with your personal data and all of the data in the ecosystem, Hims & Hers can build a health AI that would be very helpful on a day-to-day basis.

Healthcare is becoming more proactive, but it has a long way to go, and Hims & Hers has a vision for being the data aggregation layer and using that position to proactively keep people healthier.

This isn’t just a better state for the world. It’s also potentially a great business model.

Proactive Personalization In Healthcare

I hope it’s becoming clear what this vision of the future is for Hims & Hers. The company ingests as much data as possible from labs and real-time data sources to help us live healthier and prevent problems before they start.

I think it’s clear that this becomes a subscription solution in time. For a monthly/annual fee, you get labs, a scale, a wrist band/watch, etc., and Hims & Hers does the rest in the background.

The first step will be talking to an AI healthcare provider with a human in the loop when needed. We’re seeing this already with answers about what’s going on with my Labs using real data. I don’t have to get an answer from a human about my labs; the AI can answer basic questions and give me ways to improve results.

But the next step is far deeper than that. It’s finding and fighting something as deadly as cancer on a personalized basis.

This week, Moderna announced early results from a phase 3 trial of Intismeran autogene, and it may be the most exciting medical development in my lifetime. I’m not a pharma expert, so forgive any mistakes in this explanation, but I think I’ll get the broad strokes right. First, from the press release:

Intismeran autogene (intismeran; V940 or mRNA-4157) is a novel, potential first-in-class investigational messenger RNA (mRNA)-based individualized neoantigen therapy (INT) jointly developed by Merck and Moderna. Intismeran is designed and produced using a patient's tumor sample to identify the unique mutational signature, or "fingerprint," of their cancer and generate an anti-tumor immune response. Each therapy consists of a synthetic mRNA coding for up to 34 neoantigens and is tailored to the unique biology of an individual patient's tumor. Upon administration, the RNA-encoded neoantigen sequences are translated in the body and presented to the immune system, a key step in generating specific T-cell responses against cancer cells. Individualized neoantigen therapies are designed to train and activate an anti-tumor immune response based on the unique mutational signature of a patient's tumor.

Moderna press release

In short, $Moderna, Inc.(MRNA)$ :

1. Takes a sample of the tumor

2. Creates a personalized vaccine to fight that specific tumor

3. The vaccine is administered and uses the body’s natural reaction to fight off the tumor

It’s literally a vaccine for cancer!

I don’t know what will come of this specific treatment or if it will expand beyond melanoma (I would guess it will), but this is incredibly exciting.

And the key is it’s a personalized treatment. I think this is just the start of cancer vaccines, but in the future, we’ll likely have a much more personalized healthcare system. Personalized peptide stacks, personalized GLP-1s (I know, that’s a peptide), personalized hair and skin products, and so much more.

And if Hims & Hers has the data about your health and genome, it can offer those personalized treatments better than anyone else and do so on an ongoing basis.

We Are SOOOO Early

I’ve heard of this called the ontology layer of health.

Ontology is the philosophical study of being, existence, and reality, exploring what entities exist and how they are categorized and related.

Google

That’s a complicated way of saying the connective layer in the health ecosystem.

Data comes in, AI and doctors find opportunities to improve health, and Hims & Hers connects subscribers with the right answers/supply.

This is a new way to think about health, and it’s why there’s a disruptive opportunity.

This isn’t going to happen on an Eli Lilly platform.

CVS isn’t going to create this kind of data collection and analysis platform.

Your local doctor can’t do this alone.

Hims & Hers can!

And today, Hims & Hers is a $7.4 billion company. The opportunity ahead could be worth trillions of dollars.

I may be wrong in my excitement about what’s coming in healthcare, and maybe there are huge roadblocks. Hims & Hers may fail to live up to Dudm’s vision, and the stock may be a zero.

But what if I’m right?

What if a decade from now, 50 million people have Hims & Hers wearables and scales collecting data constantly, adherence to prescriptions is tracked automatically, health suggestions and even recipes are provided in-app, healthy food is automatically delivered to my door, and this becomes the leading health platform around the globe?

How much is that company worth?

Asymmetric Investing is about finding companies with 10x potential in the next decade. 0X is a possibility, but just a few 10x’s and we beat the market.

Hims & Hers’ potential isn’t just 10x, it’s 100x, or more. Andrew Dudum is telling you what’s next. He reminds me of Reed Hastings explaining how Netflix would go from DVDs to streaming 20 years ago.

I didn’t listen then.

I am now.