Wall Street Bets on Hair Loss Biotechs as Next Big Opportunity

Biotech companies focused on hair loss are competing to bring the first new baldness treatments to market in nearly 30 years, drawing investor interest.

Veradermics, Absci, and Cosmo Pharmaceuticals are each developing a different type of drug for pattern hair loss — a pill, an injection, and a topical solution, respectively. No therapy for this condition has received approval since the 1990s.

Hair Loss Biotechs Eye A Market Waiting For A Cure

Pattern hair loss impacts roughly 50 million men and 30 million women across the United States, per Bloomberg. Treatments currently available are limited to minoxidil and finasteride, both decades old. These drugs come with side effects such as heart palpitations and reduced libido.

Veradermics (NYSE: MANE) is working on an oral pill called VDPHL01. Its share price has surged roughly 500% since its IPO in February. Absci (NASDAQ: ABSI) is trialling an injection given two to three times over half a year, and its stock has more than doubled this year.

Cosmo Pharmaceuticals reported positive late-stage trial data for a topical treatment, though its stock has moved more cautiously compared to its US competitors.

Investors Chase A GLP-1 Style Trade

The excitement mirrors the stock rally at Eli Lilly, which changed how investors view consumer health biotech. That shift was initially driven by its weight-loss drugs.

Eli Lilly has put $40 million into Absci, wagering that hair regrowth could follow an injectable approach similar to obesity drugs.

“Both obesity and hair loss are large consumer markets and that’s one reason why both of those categories can offer significant revenue potential.”

Geoff Hsu, portfolio manager at OrbiMed’s Biotech Growth Trust, Fortune

None of the three companies yet has an approved product. The earliest regulatory submissions are not anticipated before 2027. Investors are betting on future demand years before any drug hits pharmacy shelves.