The benefits of next-generation peptides will be thinly spread. The last great peptide fortunes were made by Big Pharma. Novo Nordisk and Eli Lilly turned GLP-1s into blockbuster weight-loss drugs.

The spoils from the next generation of short-chain amino acids, used for everything from muscle recovery to anti-ageing, will instead be thinly spread among consumer groups. Peptides are set to be a big market, in revenue terms. About 28 per cent of respondents to a Citigroup survey said they had used one of 12 popular peptides, and would be willing to spend an average of $90 a month.

Extrapolate that to the entire US adult population, and it implies an $80bn-a-year sales opportunity. And that’s just for the current, grey market. Peptides are not licensed for human consumption.

They are sold through websites like Bio Longevity and Swiss Chems labelled “for research purposes only”. But they are edging towards the mainstream: in July, an FDA advisory panel recommended allowing six of seven popular peptides to be produced in the US. If allowed, the market could become much larger: roughly half of non-users told Citigroup they were put off by safety concerns and a lack of scientific proof.

But while peptides may well be a big market, the economics are likely to resemble those of branded consumer goods more than blockbuster drugs. The key difference between this generation of peptides and the last is that these cannot be patented, given that the formulations have been described in scientific literature since the nineties. That’s a recipe for a market with low barriers to entry, where compounders such as Hims & Hers Health and virtual health companies including Ro and Life MD will be slugging it out.

One big battleground will be branding. Social media and online advertising are already among the most common ways consumers discovered grey-market peptides. With little to differentiate compounds, marketing investment may shoot up to consumer goods levels: for reference, analysts expect it to eat up about a third of L’Oréal’s revenue this year.

The other competitive lever peptide sellers will pull is cost. Consumers appear to be strongly price sensitive: cost is the leading reason for discontinuation, the survey suggests, and raising prices from $50 to $150 a month cuts the potential user base by almost 70 per cent. That, again, does not augur for fat margins.

Still, among the potential peptide beneficiaries, Hims looks to have a few advantages. It helps that it has already established itself in the market after pouncing on a weight-loss pill shortage in late 2022 to produce compounded versions, and is forecast to spend a third of its total revenue on marketing and customer acquisition this year. Plus, it owns its supply chain, having recently acquired its own peptide manufacturing facility.

That might give it a head start once regulatory blocks clear. But such advantages may be eroded if consumer conglomerates decide to step in. They are already circling the booming wellness market.

Last month, P&G bought supplement maker Thorne and Unilever bought vitamin brand Gruns. Once peptides are approved and regulated, it may not take them long to swoop.