The Peptide Boom Is Bigger Than Weight Loss. Wall Street Is Catching On
The peptide craze has a business beyond wellness injections. While an FDA contamination warning has put that market under scrutiny, drugmakers are finding ways to put peptides into pills, with billions in potential sales at stake.
Peptides are short chains of amino acids that carry chemical messages in the body. They’re behind established medicines such as insulin and Ozempic, but getting them through the digestive system has long limited which drugs could be taken by mouth.
Pills take on injectable bestsellers
The gut tends to break down peptides before they can do their job. Protagonist Therapeutics spent more than a decade working around that problem, borrowing design ideas from the closed-loop structures found in snake and snail venom.
Its psoriasis pill Icotyde, developed with Johnson & Johnson, is already drawing blockbuster sales forecasts. Analysts expect annual revenue to exceed $5B within a few years.
Icotyde is the first oral psoriasis treatment with efficacy approaching injectable biologics, giving doctors a pill that can compete on more than convenience. That puts it up against some of the pharmaceutical industry’s biggest sellers.
In a summer survey by Bernstein analyst Courtney Breen, dermatologists reported writing roughly a quarter fewer prescriptions for AbbVie’s Skyrizi. The drug generated nearly $18B last year, showing how much business is at stake as treatment options expand.
Other markets are opening up, too. Merck launched Lipfendra, the first oral cholesterol drug potent enough to challenge injectables such as Amgen’s Repatha. Novo Nordisk, meanwhile, is seeing heavy demand for its Wegovy pill.
Drugmakers pay for a better pill
Making an oral drug work is only part of the challenge. Novo’s Wegovy pill requires 20 times the injectable dose because most of the active ingredient never reaches the bloodstream.
That gives drugmakers a reason to invest in molecules that can better withstand digestion. Novo signed a deal with Danish startup Orbis Medicines worth up to $1.4B in upfront and potential later payments, plus royalties, to pursue macrocycles, molecules with a looped structure.
Orbis launched with $93M in January 2025 and joins Unnatural Products and Dayra Therapeutics in securing deals with larger drugmakers. The appeal extends beyond replacing a needle. Better delivery could make more peptide treatments viable as pills, giving pharma another way to compete for patients who already have effective injectable options.
Protagonist's stock has more than doubled in the past year, giving it a market value of just under $9B. It collects tiered royalties of 6% to 10% on Icotyde's global sales, funding a wholly owned pipeline that includes an obesity program.
The consumer market has thinner margins
The wellness side is a different business. About 28% of respondents to a Citigroup survey said they'd used one of 12 popular peptides and would spend an average of $90 a month.
Extrapolated across US adults, that implies an $80B-a-year sales opportunity. These compounds can't be patented, since the formulations have been in scientific literature since the nineties.
No patents means no pricing power. Raising prices from $50 to $150 a month cuts the potential user base by almost 70%, the survey suggests.
That leaves branding as the battleground. Hims & Hers Health owns one of the most popular US compounding pharmacies and bought a peptide manufacturing facility in 2025.
Analysts peg the legal peptide market at $2.2B to $3.3B. Hims will sell already-legal peptides including NAD+, sermorelin, and glutathione by year-end, according to CEO Andrew Dudum. Wall Street isn't expecting much near term.
"There's no 'release the floodgates' demand like there is for other peptides."
Paul Cerro, Cedar Grove Capital Management
Safety data cuts both ways
An FDA advisory panel in July backed allowing compounding of six popular peptides, over staff objections about limited evidence. The recommendation is nonbinding, and final rulemaking could take about a year.
Dozens of illnesses have been linked to possibly contaminated injections of glutathione. Some people were hospitalized, with reports from at least four states.
The FDA urged compounders to stop using certain unsterile lots sold by a New York company called Medisca. A Texas pharmacy recalled its compounded glutathione in August after adverse event reports.
"We were waiting for a compounded peptide to hurt someone," said Dr. Peter Lurie of the Center for Science in the Public Interest.
How to think about exposure
The drug side has patents, royalties, and proven efficacy. Protagonist earns cash flow regardless of who wins the wellness market, though most of Icotyde's economics sit with J&J.
The consumer side runs on marketing spend and price competition. Hims is forecast to spend a third of total revenue on marketing and customer acquisition this year, close to L'Oréal levels.
Consumer conglomerates are circling too. P&G bought supplement maker Thorne last month and Unilever bought vitamin brand Gruns.
One analyst expects Hims' peptide business to top $1B in revenue over the next five to 10 years. That's a long runway for a stock priced on faster growth.
