Ozempic and Wegovy: How 2 diabetes medications became the most popular weight-loss drugs
57:14 Share

Welcome to Most Innovative Companies. I'm your host, Yasmin Gagne, joined by my producer, Josh Christensen. Hey, Josh. Hey, Yas. Josh, we're about to talk about Ozempic. Oh, it's a long time coming. Well, we've talked about it once before. We're going to talk about it again. We've chatted about it, but not in this depth.

If you were taking Ozempic right now, would you be panicking at the thought of sitting through this many Christmas meals? Or holiday meals?

Terrify me. The side effects are gnarly. Yeah. I think for me it's more that you have to be on it for your entire life. Or else you rebound. Yeah, it's all very... I'm sure there's a lot of nuance to those sort of things, but I...

I can't bring myself to want to do that. But like, I know people who have been on it who like swear by it. But I also just really love to eat. I love good food. So that I would miss. I'm also there. The other thing that happened, I believe last week is that Oprah came out and said she was on a Zen pic, which I'll be honest here. As soon as I saw those photos of her at the Color Purple events, I was like, someone took a Zen pic.

I assume every celebrity is on Ozempic in some form. She is a celebrity who has publicly, her weight has publicly yo-yoed, right? She's famous for dragging. Yeah, she's struggled with her weight throughout her career. She's been very open about that. But she also has a big stake in Weight Watchers, which has now acquired Sequence, which is a platform that can prescribe Ozempic. So I guess now it's on brand for her in a way that it was not previously. Yeah.

Yeah, I guess so. But I mean, the overall thing is, and this is more of what we're going to get into later, is that only a small percentage of people can actually afford to be auto-Zempic, which is like the other thing that is, you know, further...

further exacerbating what this whole body image thing is about. But we don't want to scoop ourselves too much. Later on today's episode, I'll be talking with Trina Spear, the co-founder of Figs, which basically makes cool athleisure-like outfits for healthcare employees. We chatted about how they donated scrubs and supplies to hospital during the pandemic, and eventually how she and her co-founder also took the company public.

But first, weight loss drugs Ozempic and Wegovy made a big splash this past year, to say the least. And here to help me understand this phenomenon is Fast Company contributing writer Adam Blustein. Hey, Adam. Hey, Yas.

As we sort of intimated before, Ozempic was really hard to miss this year, from the sort of earworm jingle to the proliferation of ads everywhere on the subway. But you actually went to Denmark to report on Ozempic's maker, Novo Nordisk. Tell me how they managed to get such a foothold in the American drug market and in society in general.

Sure. Well, it's actually a longer story than many people probably imagine. Novo Nordisk itself, they call themselves a 100-year-old company, so they actually just celebrated their 100-year anniversary this year. The company was formed by a merger of

two small companies that have been producing insulin since the 1920s. And insulin has always been Novo Nordisk's main business. They're the biggest supplier of insulin in the world. So that's a life-saving medication for people with type 1 diabetes.

Ozempic and Wegovia related to diabetes, have they just generally been like a diabetes focused company? Yeah. So Novo has been a diabetes company, the biggest diabetes company where their main competitors are Eli Lilly and Sanofi.

What happened with the insulin business is several years ago, starting eight or so years ago, there was a lot of pressure on the price of insulin. And so the margins that Novo was making were getting slimmer. In 2017, they got a new- No pun intended, right? Sorry. Yeah, oh. Oh.

Didn't even think about it. Got to be careful. So in 2017, they had a new CEO come in. I'm going to butcher his name, but Lars Fregard Jorgensen, a longtime insider at the company. He took over from the previous CEO who'd been in charge about 15 years. So this is a stable company.

And he saw this situation where their insulin franchise was becoming less profitable and they needed to do something new. So for about 15 years now, they've been developing a class of drugs called GLP-1 agonists.

which work in a different way than insulin. They basically regulate a receptor that's in the pancreas that helps control blood sugar levels. And they discovered in so doing that, it also has this effect on weight and that in the clinical studies they did on these drugs, they saw weight loss along with the control of type 2 diabetes.

So initially they had a drug called liraglutide, which was later marketed as succenda, which was a GLP-1 drug, but it gave people weight loss around 7% or so. Got it.

It wasn't really a big hit because people didn't see it being effective enough to warrant the side effects. This was also an injectable that you had to take every day. Ozempic and Wagovi, you can take once a week. This liraglutide was okay, but not so great. But they had another molecule waiting in the wings. Well, not really waiting, they had to develop it, which was sclerotid.

And there's two ways of pronouncing this. I say semaglutide. Some people say semaglutide. Oh, semaglutide? No. Oh, no, I don't like that one. Yeah, I know. So semaglutide, semaglutide is the main ingredient in both Ozempic and Wegovy.

So they started doing clinical trials and releasing results of clinical trials of this new drug in 2016 and saw that it was great for controlling blood sugar in people with type 2 diabetes. And people in trials lost an average of like 15%

of their body weight within the period of the trials, which was like 68 weeks, so a little over a year. A 15% body weight was a big deal and was really a game changer. So there was a big shift when they showed that level of weight loss.

And then once that drug was approved by the FDA in late 2016 and then started to be marketed in the U.S. in January, we saw it start to take off almost right away. This may be...

I feel like this is the simplest of questions, but it's basically how. How do these drugs cause this weight loss? It's not intended for this purpose in terms of how it was originally developed. So how is it having this major effect?

He says it stops being in the pancreas and then your brain is not hungry anymore, Josh. But that's that's no, the pancreas thing is it is it is that this is the steps that I died. I've never and I've read so much about this.

this topic so far over the years and I just still don't get it. One of the interesting things about these drugs is that even the scientists who've been developing them don't completely understand all the ways that they work.

So reassuring. Well, we know that they work. So we know that they do something in your gut and we know that they do something in your brain. The reason people lose weight on these drugs is that they're not hungry anymore.

and they don't want to eat as much. What's fascinating initially to me was that that's great. So it removes this craving for food. But what other researchers at Novo and outside of the company have been discovering is that somehow this drug seems to remove or control craving for lots of things, for alcohol, for drugs. They've been trialing it for like opioid stuff, right? Probably. I'm not sure about that. I know there's an ongoing study, um,

for people with alcohol use disorder, but there's a lot of interest in looking at semaglutide as a potential treatment for a whole range of addiction disorders, which I think is really fascinating. So there's a brain part, there's a gut part, there's something to do with inflammation and

we're really still exploring everything that these types of drugs can do. Is it fair to say, though, that, you know, we obviously know the immediate side effects, which I'd love for you to take us through. We don't really have any long, long, long-term studies, right? People have to take this drug their whole life. We don't know what that's going to look like after 40 years of use. That's a really good point. One of the reasons why some health insurers in the U.S., like Blue Cross and Blue Shield,

do not cover the weight loss drugs in general, and they definitely don't cover any off-label prescribing. It's that they say, look, we haven't seen enough of the long-term effects here. So in the short term, people experience typically nausea, vomiting, diarrhea, constipation, just in general,

stuff in your gut that you can imagine. Some of the more potentially alarming side effects is that there have been a couple of few hundred reports of people in the US and Europe experiencing suicidal ideation or even suicide attempts while taking the medications. That's something that the regulatory agencies are taking a look at. There's issues with the speed of weight loss that people can have

on Ozempic or Regovi that it can happen so fast that if you don't maintain proper nutrition, you lose weight too fast, your skin sags, you lose muscle mass. So we've heard maybe like Ozempic face, that's like losing the fat from your face too fast and you get saggy. You just got to do it the old fashioned way by getting your buckle fat removed. You know, you brought up the fact that insurance obviously says sometimes they don't want to cover it

for a bunch of sort of medical trial reasons, that does kind of sound like an excuse because this drug is very expensive, right? Yeah, well, it's a complicated answer, yes, but drug pricing in the U.S. is really complicated. So we have a list price for drugs here,

Many, I guess most people never pay or see the list price of a drug because your insurance is covering it or it's being discounted in some way. So the list price for Wegovi, which is semaglutide that's approved for weight loss, is about $1,300 for a four-week supply. Wow.

And as Josh pointed out, these are drugs that in order to maintain the weight loss, you have to keep taking for your whole life, essentially, or you have to do some sort of treatment for your whole life. So if that remains the cost, if that's what you're actually paying, yeah, that's a high-priced drug. Ozempic, which is approved for treating diabetes, costs a little less. The list price is around $1,000.

But there's all sorts of discounts that middlemen called pharmacy benefit managers negotiate with the drug company so that insurers pay a little bit less for these drugs. And they're supposed to pass along these savings.

to consumers, which doesn't always happen. The company, Novo Nordisk, will tell you that for people whose insurance does cover Wagobe for weight loss, they'll pay like $25 a month for a prescription. So in that case, that sounds pretty good.

Medicare, which is care for older Americans, does not cover any weight loss drugs, which is a big deal. If they did, they'd be paying right now billions and billions of dollars a year to do that. However, there is a lot of need in that population and there's a lot of pressure on Americans.

the government to change the rules around covering weight loss drugs because there are such potentially broad societal impacts and cost impacts for the bigger healthcare system of having more people who are less obese. There is so much demand for this drug. Does that mean Novo Nordisk has a lot of leeway when it comes to pricing? Yeah, so drug companies come to the U.S. because...

We pay really high prices for drugs here. One of the greatest things about this country. Super cool. We pay three to four times on average what comparably developed countries like countries in Europe, for example, pay for drugs. And it's because we don't really negotiate drug prices.

prices here. So that's something. Right now, Novo has blockbuster sales of both Ozempic and Wigobi. They cannot keep up with demand for Wigobi. They can't make it fast enough right now. They don't expect to catch up with demand until well into this coming year. It's economics, right? We've got crazy demand. People are willing to pay this price.

we're going to keep charging this price. And I'm not saying that they're evil for doing this. They're a business. They're set up to make money, but this is what drug companies are doing.

allowed to do here. We have a system where the price of drugs is entirely based on what the market will bear. And if there's no competition or if there's not competition for a drug, then drug companies can essentially name their price. Now, they negotiate drugs differently in Europe, where they look at the efficacy and they make a determination of what should cost based on that. And until now, we don't do that here, although we're going to start

Where do insurance companies sort of play into all this? Insurance companies in the U.S. are figuring out where they play in this system because the drugs are expensive. So even with negotiated prices...

I think the American Enterprise Institute estimated that insurers are still paying about $700 for a four-week supply of Wagovi and about $300 a month for Ozempic, which is still a lot of money. So they don't want to pay that if they don't have to.

Different insurers are doing different things. Some are covering weight loss drugs, no problem. Some will only cover Wigovi if the person also has another weight-related health condition. Comorbidity. A comorbidity. So there's really a push and pull. And in the short term, we don't know in the next couple of years whether more insurance will cover or fewer insurers will cover Wigovi.

However, in the long term, most people I speak to believe that that coverage will expand, especially as these drugs show benefits beyond weight loss.

The Biden administration is pushing for more regulation on pharmaceutical pricing. And tell me a little bit about that and how Novo Nordisk is dealing with it. This is a really big deal for drug makers. I'd say 100% of them are really unhappy about what's happening. So one of Joe Biden's signature piece of legislation is the Inflation Reduction Act. And as part of that, the U.S. is going to start negotiating the prices of some drugs.

The 10 most used drugs by people on Medicare. So just a list of 10 drugs starting in 2026. These prices will go into effect. This is entirely new that the government is actually negotiating prices.

Novo Nordisk, along with Johnson & Johnson, and I think all of the other companies whose drugs are on this list are suing the U.S. government over the whole idea that we're going to negotiate drug prices. I ran into a lawyer at a party a while ago and I was like, well, what kind of lawyer are you? And he was like, put it this way, I make sure people pay adequate amounts for the drugs that they need. Right.

to save their life. I was like, cool, yeah, the Lord's work. But you mentioned Johnson & Johnson there. How does Novo Nordisk compare to these other conglomerates? - Novo Nordisk has been, for one, a little bit of a smaller company than the companies that we think of as like giant big pharma.

But they're certainly big and they're getting bigger. You look at the numbers, like who's spending the most. Novo's numbers are a little bit lower, but that's just because they're relatively smaller than these other companies. So at the beginning of your article, you listed a bunch of things that Denmark is known for. And one of them is the Little Mermaid story. And I believe this relates to Ozempic, but you'll have to tell me how. Sure. So...

The specific mermaid reference came from my editor. But when I was in Denmark, the big thing that I was noticing was... A lot of mermaids. One, I was noticing how fit and healthy people looked and thinking, wow, isn't it ironic that the biggest weight loss drug ever comes from this country where everyone's riding bikes...

and everyone looks great. So the Little Mermaid statue is one of the big tourist sites to see when you're in Copenhagen. I actually didn't find it and found this other mermaid statue that's really cool, too. You had one job aside from reporting. Yeah, I know. The other one was a beautiful statue, though. So Hans Christian Andersen is like the literary genius

of Denmark, wrote many classic fairy tales, which are all kind of dark, really. But those of us who saw The Little Mermaid in the Disney version didn't see all the darkness in the original story. So as a

As I was sort of exploring, well, what's this story about? Is there a metaphor here? I went back to the actual Hans Christian Andersen story. A really interesting thing about that is the sacrifice that Ariel the mermaid makes.

to become a human, which includes, we know the losing her voice part. But the other thing is that in order to walk on human legs, the sea witch tells her that every step you take is going to feel like you're walking on shards of broken glass. What? Are you serious? Yes.

Hans, Hans, Hans, my guy. It also ends very badly. Yeah. For children? How did she die? Well, you want the real story? So when the prince does fall in love with somebody else, there's a punishment built into the witch's spell that he's going to die for that punishment.

But Ariel makes this deal because she loves him so much that she'll die instead. So she sacrifices herself and turns into some sea foam. And he falls in love with another girl? Most likely one that doesn't go, ah! Every step. And every step. Like, she seems really depressed. Like, I need someone's help. Right.

So although we just sort of name check the mermaid, there is this real deeper layer of metaphor there, which some might consider an appropriate analogy for what people put themselves through, you know, to lose weight, to literally to transform their physical being and change.

the transformation that people experience with these new drugs is really remarkable, seems almost, you know, fictional. Morgan Stanley estimated something like 7% of the U.S. population is going to be taking, you know, weight loss drugs like this, right? That's one of the estimates. There's all sorts of estimates about how high this total obesity market could go. Yeah, I mean, when you look at the fact that in the U.S.

42% of U.S. adults are considered obese, which is a body mass index of 30 or above. So imagine just capturing part of that market with these weight loss drugs, right? I mean, you get to 7% easily. If everyone took these, forget about it.

So, yeah, it's a huge market. These drugs are really kind of first generation or second generation. And there are pretty surely much better versions of these drugs.

that are coming along, both from Novo Nordisk, Eli Lilly, and from other drug makers. So I want to come back to that point in a second. But, you know, these numbers are actually pretty staggering that you're talking about. The World Obesity Federation predicted that 51% of the global population will be overweight or obese by 2035. But it's also interesting because I feel like Ozempic and Wegovii

occupy this weird space in the culture, right? Where some people act like it's shameful. Other people might say that being overweight or obese is not a serious condition. Where do you think we kind of stand now with that? This is really interesting. And whenever I talk to people about this subject, tell them I'm working on this story, one common reaction I get is really like outrage. Really? There's a lot. Yeah. There's a lot of people who are upset that...

that, oh, people are just taking a pill to get skinny, which I think really ignores the fact that for many people, and this is the line that people at Novo Nordisk like to repeat, obesity is a disease. And it has not been treated like a disease by...

our culture, and even by a lot of people in the medical establishment. So I would really say the one positive thing that the development of these drugs and their popularity has done is to show people that it's a disease because when you treat it with these drugs, it's cured or it's made

better by taking these drugs. So it's kind of analogous to the way depression was treated and thought about maybe 15 years ago before we had really good antidepressant drugs. So seeing an effective drug really reinforces the idea that this is a disease

And starts to change the conversation because really the things that we've traditionally done to help people lose weight are not that effective. And Weight Watchers has done studies on this and found that only about 10% of people doing lifestyle changes to lose weight can lose, you know, like 20% of their weight. And fewer than half of people can lose a smaller amount of weight, like 10% or 5%.

The data just shows that lifestyle interventions do not work for the majority of people. It's just not right to stigmatize people for what for many is really a medical condition. So you and I, we may exercise, we may eat well, and we maintain the weight we want. We could have a friend, a relative who does all the exact things and doesn't

Part of me thinks the reason there's a lot of stigma is because of its sort of off-off-label use by people who have sort of relatively quote-unquote normal or standard weight, if that makes sense. You know, your celebrities who have gotten extremely thin, for example. That's right. And that has been a real issue that Novo Nordisk and to some extent Eli Lilly have had to contend with.

So as I said, Ozempic and Wegovy are based on the same molecule, semaglutide, semaglutide.

They're just at different doses. So Ozempic was the one that was available first. It was first approved. And people knew that it helped you to lose weight. One reason why is because in those Ozempic ads, they told you that it helped you to lose weight. So after telling you that it controls diabetes, the ads would say people who were in the study lost 12 pounds of weight on average. Isn't that great? And then they'd go into the fast part with all the other side effects. But that part, though...

They made sure that you could hear. People went to their doctors and said, I want this. I don't really have diabetes, by the way, but prescribe this for me. A lot of those people were, you know, either in Hollywood or were influencers in some way. You got Elon Musk.

You've got maybe a Kardashian or two taking these. But it was kind of this secret that everyone knew that you could get Ozempic and you could use it off-label for weight loss. And so the company is aware of this. They officially frown upon the use of the drug for weight.

other than its intended purpose, but it's driven a lot of the sales. And so I think that that's been sort of damaging to getting out this message that obesity is a disease that we should take seriously, you know, and that these drugs aren't just for getting yourself together to go to an award show. It feels like it's looped into just the general like cosmetic, um,

medicine or cosmetic procedure type stuff. Like I feel like people look at Ozempic the same way they look at Botox or facelifts or, you know, the, the kind of various cosmetic procedures that seem one like elitist classist and unnecessary. And there is a whole world of this that is being ignored in terms of where it can be useful. We alluded and talked a little bit earlier about other potential future, uh,

intentions around cravings around drugs and alcohol and opioids and other addictive materials. So what can we expect next, just in the space and for Novo Nordisk? So Josh, as you point out, there's been this tendency to not take weight loss and weight loss drugs that seriously, to sort of lump them in with cosmetic drugs like Botox or like drugs for erectile dysfunction,

for example, versus treating them as drugs for a chronic condition like, say, heart disease. So to that end, one of the really very smart strategic moves that Lars Fragard Jorgensen did when he took over. Great job with that name, by the way.

by the way, was to see that in their safety studies on Ozempic, they saw that people seem to do well cardiovascularly, that they're, in fact, they didn't have problems with their heart, that they seem to improve on a lot of measures. And he authorized and launched a very extensive study of thousands of people around the world

specifically to study semaglutide in people who had heart conditions. This study went on for five years and they just released the results from it this fall. It was really remarkable, you know, what they saw. Like it reduced the death by any cause by 19%. That's crazy.

Yeah, in this group of people with chronic disease. The disease stopped progressing. You didn't have heart attacks, like a 28% reduction in heart attacks. So that's remarkable. And for Novo Nordisk, the great thing about it is insurance companies might balk at

paying a high price for a weight loss drug. But when you have a drug that's showing a strong benefit for people with cardiovascular conditions, with heart disease, that's a whole other matter. And it's going to be a lot harder for them to object to paying for these drugs

In addition, NovoNorse just stopped a trial in patients with kidney disease early because it was so successful, because semaglutide was so effective in reducing the risk of disease progression and death. They said, this is working. Let's move on to the next phase. Josh, are you convinced?

All right, guys, I'll do it. I'll take it when it's cheaper in a pill form and doesn't make me want to kill myself, literally, not to be flippant, then I will consider taking it. You just got to do a little more, right? Just a little more, and then we'll be fine. I think we can end this one there. So we're going to take a quick break, followed by my interview with Trina Spear. ♪

I want to get into all things FIGS, like the IPO, what the pandemic was like for you. But before we even start that, tell me about why you decided to start FIGS. Like, why did scrubs need some innovation? Healthcare professionals were really this overlooked and underserved part of society. And they were subjected to wearing these baggy, ill-fitting, uncomfortable scrubs as their uniform to go to work and do their job all day. And so...

The big question that Heather Hassan, my co-founder, asked herself when she had the idea for FIGS was, why are there these multi-billion dollar companies? You know, Nike, Lululemon, Under Armour. Why are all these companies that are so focused on athletes? Athletes are amazing, but what about the people saving lives? And that question really stuck with me as we were setting out.

to build this company. Now, did either of you sort of come from any kind of healthcare background or was this like a totally just like you saw a gap in the market business idea? She came from the fashion world and really understood how to make great product. And I came from a financial and operational background. So I think it was a great kind of we say we're yin and yang, kind of two sides of the brain. But I think that

really just had this love and respect for healthcare workers and didn't understand why no one was focused on them and no one had made their lives easier and no one was building products that helped them look good and feel good and perform at their best. So that's what we sought out to do. As you were challenging, and this is me not knowing enough about the scrubs industry, but I'm guessing there aren't like a ton of manufacturers

Am I crazy? Like you're sort of challenging one or two big incumbents. Yeah, I mean, that was the thing, right? There were these two types of companies in the world. There were the companies that made scrubs and they, you know, were really just licenses of other companies. So they were just taking fabric, putting somebody else's label on it. And then there were the second kind of companies, the companies they sold to, which were these, you know, thousands of retailers across the country where they were putting scrubs on racks next

to medical supplies like bedpans and knee braces. And so it was just a really horrible experience. And so that was the world. That was the uniform world before Figs. - Were you ever worried they might just tweak their designs to mimic yours?

You know, at FIGS, we say we don't look left, we don't look right. We have very, very focused on what we do here on creating amazing products and selling them directly to healthcare professionals. We're the first DTC company to really build a brand community, decommoditize what many believe was a commodity product.

But it was also hard for these companies to shift and they still really haven't pivoted. And it's been 10 years, right? They still sell pretty much the same products to pretty much the same distributors because that is very hard to break down, right? They're making...

billions of dollars with the current setup, where they're giving a 60%-ish margin away to the retailer. They're giving a 10-ish percent royalty fee away to the license holder. So it leaves them very little room in terms of their economics to innovate on the product.

And there's also a channel conflict. If you're selling to one of these retailers, you can't sell direct or they'll stop carrying your brand. And so that's been the really difficult part of being what we call one of these outdated players that really is stuck, what we call the anti-mote. They can't get out of the strip mall.

You know, I remember we wrote about Figs when I first started at Fast Company. I think that was in 2018. Things have changed a lot since then. At the time, you had a direct-to-consumer model and you'd raise some money, but

But tell me about, you know, how things look now. Yeah, so I think it's funny. I remember 2018 well. I think we just started really, you know, we had set the foundation of the business and 2013 is when we started. By 2018, the business started to really take off. And so...

But, you know, what was true in 2018 and what was true in 2013 is still true now in 2023, where where are we focused? We're focused on creating the most amazing products for the best people we know, who we call our awesome humans, our health care professionals. And we're focused on continually connecting with this community of people. If we can represent the best of them back to them.

That's the dream, right? That is where we are able to kind of inspire the next generation to want to be like them, not just want to be athletes and celebrities. And it's all that comes back to this question of who do you look up to? And we think that people should look up to healthcare professionals because they are doing the world's most important work.

We've seen the business, you know, as I intimated before, go from a direct-to-consumer model to having some brick-and-mortar locations or pop-ups. And I think a lot of direct-to-consumer companies have done that. You know, why was it important to expand into the sort of brick-and-mortar retail market?

So we don't actually have permanent stores yet, but we're excited to build them. We've always had, to your point, pop-ups, activations. We've always connected with our community in person. We think that is what really drives the digital side of the business. We believe that being in person with our community is the best form of

connection. And so, you know, we are going to continue to do what we do best, which is really grassroots marketing. Be with our people. Our stores are not just places where you can shop for our uniforms. It's also places where you can connect with us and connect with each other. We have a whole series of programming that will be

rolling out within our community hubs over time, where we'll be speaking about topics that are affecting our community. Because our whole goal is to show up and serve in unexpected and meaningful ways. And so that's everything from mental health specialists to topics around mentoring. How do you get promoted to the next level? What are the different aspects of medicine? Because it's always evolving and changing. It's

the fastest growing job segment. There's always change. Medicine is continually changing. And so how do we help support

the healthcare community as medicine changes. At this point, FIGS is sort of ubiquitous enough that most healthcare professionals, I would say, or that I encounter kind of know about it. But how did you first get a toehold when it comes to advertising to them? We thought about that differently than I think most brands do in that it was all about the healthcare community and how FIGS would show up alongside them.

And so that comes into play from anything from our ambassador program, where we now have 350 of the most influential voices in healthcare that are really representing the brand in really cool ways, to putting real healthcare professionals in our marketing campaigns, on billboards, on buses.

So that you're not just seeing people that you're used to seeing, right? You're seeing real healthcare professionals that are getting on planes with baby's hearts to go save a baby's life at another hospital. You know, they're like Lexi Robillard or people like Anna Wilkinson that during COVID would fly to the hospital that was getting hit hardest to run to that front line to save essentially all of us. And so, you know, I think it was about showcasing the people doing the work.

in the campaign and others being inspired by that? Because to us, that's true greatness. And how do we inspire the world through what the healthcare community is doing? Prior to going public, you raised quite a bit of money, especially for two female co-founders. I am curious, tell me about the fundraising process.

Tell me if it was the right move and tell me, you know, does that model still work today when we're seeing a lot of direct-to-consumer companies like maybe not doing as well? Sure. I mean, actually, if you look at the business today, I think we've generated over $1.5 billion in sales. And the amount of capital that we spent to get here and generate that revenue is about

$10 million in total. And so we had about an additional $55 million. Our total raise pre-IPO was $65 million of primary capital. And so about $55 million we had never spent. It just sat in our balance sheet. And so I think it's back to, it was really hard to raise, right? No one really understood the business. And frankly, investors...

aren't our customers, right? They're not healthcare professionals. So they truly didn't understand all the pain points. They didn't understand the experience of being a healthcare professional and how we were changing that experience, what it was like to be a healthcare professional. It was super hard. We didn't know if we would be able to continue to raise. So our focus was on building a profitable company. Growth, we're a growth company, but we also wanted to ensure that we were a sustainable business, that we can own our destiny and control

how we scaled and built. And so that was always front of mind. And that is why we were focused on both growth and profitability. I think today, you know, it's a little bit of a tale of two cities. I think for some companies, it's, you know, they're just raising hundreds of millions of dollars and you see the round after round after round. And then you see companies that, you know, are bootstrapping and really figured out how to scale growth.

and found what I call arbitrage opportunities that help them do so. And that's been really cool to see those brands that haven't spent much to get to where they are and do it, I would argue, the harder way and the authentic way. Give me an example of an arbitrage opportunity. Okay.

Well, I would say arbitrage opportunities change and evolve, but a big one was our ambassador program. I mean, these weren't influencers. These were just healthcare professionals that had something to say. And what we did 10 years ago was we said, we're going to give you a platform to talk about what you do and how you do it, to talk about the triumphs

and the challenges within healthcare to talk about what it's like to be an RN or an NP or a PA or a physician within the healthcare system in America and how fulfilling it is and how incredible it is, but also how hard it is. And one of our mottos for us as a team, but also for our community is, if it was easy, everyone would do it. And healthcare professionals know better than anyone that days are hard and 12-hour, 16-hour shifts are hard, but it's also worth it. And so

giving healthcare professionals that platform, they were growing their base, right, across social as they were helping to build the business, helping to build FIGS. And so, and, you know, we didn't have contracts at the beginning. We weren't really even paying people. We were just sending them gear and they were, yeah, we're sending them, you know, FIG scrubs. And over time, our full layering system from our fleeces and our vests and our underscrubs and our compression socks and everything that you wear to work. But

That, I would call, was a really big arbitrage opportunity where we were giving them that platform and they had something to say. That makes a lot of sense. I want to talk a little bit about how the pandemic affected FIGS. Now, I know you donated a lot to medical workers. Medical workers became essential workers. But I'm curious how it affected your business. Did you see growth supercharged? COVID was this interesting time, right, where...

Finally, there was a spotlight on this community, right? Everyone was cheering at 7 p.m. every night outside on their balconies for healthcare workers coming out of the hospital. And it was a really insane, intense time for our community. And we were right alongside our healthcare professionals that were kind of going out to fight this battle. And we're hearing firsthand from them just the challenges they were facing and

cleaning their mask in an oven to what number body bag they were on for the day in terms of the deaths they were seeing in COVID. And so it was just hearing that firsthand, it was like this call. I mean, we've always been felt responsible to this community, but it was like, we need to do something.

We need to show up with PPE, with masks and isolation gowns and hazmat suits. And we shifted our supply chain. And it's a true benefit of being a young, nimble company, shifting everything that we were doing so that we can get

our community what they needed to go to work and feel protected. We felt this responsibility to do that. And so there was, I would say, you know, we grew, we continued to grow through the pandemic. I mean, we were growing 100% every year pre-pandemic. So we kind of continued along that trajectory. But I think it was bigger than that. It was, wow, FIG showed up. Mm-hmm.

And now we even feel coming out of this pandemic, there's a lot of things that have come out of this pandemic that has impacted our community. And we feel that we have to show up again, right? It's different, but in some ways it's more meaningful given some of the PTSD, some of the mental trauma that has gone on and how can we show up and support. And that's what we're doing with our advocacy. We're showing up with our Awesome Humans bill and

working on, like I talked about, the community events so that we could really support and serve at the highest level. I want to talk a little bit about the decision to go public. You went public in 2021. Tell me about why that was the right time for you all and what factors you sort of looked at. You know, I think it was back to we had built a real business, right? We had coupled extremely high growth with high profitability.

We didn't cut corners along the way. We feel like we really built a real business the right way. And so going public made sense.

once you've built a sustainably profitable business. I think going back to our community, our IPO also became a huge opportunity to shine a spotlight on our awesome humans. And that's what made our IPO so special. It was about them. I mean, we had all our healthcare professionals on the podium ringing the bell with us. We had 60 healthcare professionals at the New York Stock Exchange. They were there throughout the entire process.

And it was really about highlighting and spotlighting their incredible contribution to society as it was still during COVID in May 2021 when we went public. And so inside the business, nothing really continues not to change in terms of the business. We run the company the same way as when we were private to when we were public. We're building for the long term. But I do think

continuing, and IPO was part of this, continuing to shine a spotlight on this community, continue to serve them, and to continue to get other people to be inspired them as well. So you're saying sort of going public didn't make that much of a difference in terms of how you run the business.

I am curious, every stock has sort of taken a beating, I think, over the past year. Has that affected whether it's like morale or anything you do within the company? Or do you think there's something investors are misunderstanding or analysts rather? Or, you know, do you see this as just like a cyclical phase? You know, I think the stock price is not something that I pay a lot of attention to or our team pays a lot of attention to. Like,

our mission is so crystal clear. You know, we wake up every day to empower and celebrate and serve those who serve others.

And we know our why, right? That's why we wake up in the morning and that's why we do what we do. Over time, as we continue to execute, the stock market, investors, analysts will catch up. But we are focused on our healthcare community. I'm personally focused and our leadership team is focused on our team here and ensuring that we're focused on our community and we're focused on our team. And I think over time, the output is the numbers, the output is the stock price, and that will take care of itself.

FIGS, as you said, has expanded into offering sort of different product categories, whether that's like

and outerwear, compression socks. I guess our last question is really what impact, I mean, or rather what comes next? What comes next for you guys? What can we look forward to from FIGS? We're really building an iconic brand, right? And we're doing it the right way over the long run. And so it all starts with product, right? Innovation of products across our layering system, continuing to bring products

awesome products across our layering system from our scrubs to our under scrubs, to our fleeces, our vests, everything you're wearing to work and at work and from work, both on shift and off shift. There's so much more that we're excited to bring to this community from a product standpoint.

And connection with community. I think, you know, we've changed how people think about being a healthcare professional. Our goal is to change the experience of being a healthcare professional, make it better and as awesome as possible. And so, you know, we're going to continue to showcase the best of our community in really interesting and fun and meaningful and unexpected ways. And then there are healthcare professionals around the world.

that are underserved and don't even yet know about FIGS. And there's actually parts of the United States that don't yet know about FIGS. So there's a lot of room for territorial expansion. Yeah. And I think retail and what we're doing with our community hubs to everything that we're doing with our teams business, which we haven't talked about, but that's kind of how we're partnering with institutions. So I think over time, our goal is to continue to show up and serve healthcare professionals in the

in so many cool ways and do it in the most authentic and fun and empowering way possible. So actually, let's talk a little bit about teams and sort of partnering with institutions, as you mentioned. I mean, tell me more about that program and what a difference it's made to your bottom line.

So we just started getting all these inbound from concierge medicine clinics, from hospital departments, from private practice saying, hey, I love figs. I love your scrubs. And I want to order them for all of my employees, right? My whole team. And so that's what that business has been today. Us, we built a platform that helps serve, you know, if you want to order hundreds, thousands of sets of scrubs for everyone in your institution.

And we're seeing more of that because health care is becoming more consumerized, right? You're seeing it within the one medicals, Ford Health, Next Health. You're seeing it within veterinary care, with modern animal, with bond vet, et cetera. And so you're even seeing it with fertility, actually, and all the fertility clinics that have come up to help serve women and families around the world.

And so all of that kind of as they're looking to professionalize and standardize their team, they're turning to FIGS and saying, hey, can you help us do it? And outfitting everyone and helping them look good and feel good. I mean, that's our goal. Help everyone look good and feel good and perform at their best. That makes a lot of sense. Well, Trina, thank you so much for coming on our show. I really appreciate it. Thank you so much, Yasmin. Thank you.

Okay, we are back with Adam and it's time to wrap up the show with Keeping Tabs. This is where each one of us shares a story, trend or company we are following right now. And Adam, since you're our guest, what are you keeping tabs on? Two things, I guess. One is the use of AI in drug discovery and drug development. So this is really the first

flavor du jour of AI applications now. Everyone realized there's money in that space. There's a lot of investment flowing in there. Have you been reading MIC applications, most innovative companies? That too. But I get many, many pitches about AI and drug discovery. So I'm

sorting that out. And then the other thing that's really been interesting me is quantum computing. And I've been learning a lot about that. It's, it's something that's very early, but as I've learned, it's something that's real. And there's a lot of interest in this space and it's heating up. It doesn't become mature for five years at least.

but there's a lot of really interesting things happening there. - What is quantum? Dil, like what, actually, I'm gonna be dumb for a second. What is quantum computing? - All I know is it apparently doesn't work, but you just said it works, so I guess I don't even know that. - I was hoping you wouldn't ask that, Josh. - In the simplest terms.

In the simplest terms, regular computers, traditional computers are able to hold, like the bits can hold two states, a one or a zero, a yes or a no. Quantum computing, instead of that, uses electrons that exist in a quantum state, meaning they can hold multiple possibilities and calculate multiple possibilities at once.

So instead of like every time you change a variable, you have to run a new calculation on a computer. You can actually calculate all of the different variables in all their combinations all at the same time. That clears it up. Okay.

So it's a big idea. And right now they're really building the machinery for it, the hardware for it, starting to do some experimental calculations. But you're sort of right, Yaz, that it doesn't really work yet in that people aren't solving the big problems that we think we'll be able to solve. But they're just showing that this idea works and developing the hardware and the infrastructure for making these calculations. Watch this space.

I will say I probably won't be getting into quantum computing reading. I did last year read upwards of 20 books about the history of computing and internet for a series that I produced called Computer Freaks on Inc. Magazine. Check it out wherever you get your podcasts. Shameless plug. What else are you keeping tabs on? I'm keeping tabs on, I'm going to try to compete with the kind of highbrow audience.

of what I'm keeping tabs on. I'm keeping tabs on the Fed and their recent decision to hold steady yet again on interest rates, but more pertinent was their signaling that interest rates will be lowering starting with possibly or projected at least three cuts in 2024.

And then continuing cuts in 2025 and 2026. And now we all know best laid plans. You know, things change very quickly in the market, but it is interesting to keep a tab on because I think this past year, especially, and,

In kind of the past few years with inflation, with the interest rates going up, capital has been harder to get for small businesses, for consumers. And then a number of other factors have contributed to the much talked about VC winter trend.

and funding winter, Silicon Valley Bank collapsing, First Republic Bank collapsing. There's one other bank that collapsed that I can't remember their name, but I'd be interested to see what happens going forward with these interest rates going down and inflation steadying in terms of kind of the business space and funding, whether this will rebound in turn as part of this. So that's what I'm keeping an eye on right now, how 2024 and 2025 are going to change in terms of access to capital.

I love the Fed Theater, you know, the way they craft every sentence to be like, there are conversations about, you know what I mean? It's

It's so specific and there's so many like little committees. Yeah, there was one. I don't have it up in front of me, but there was like one turn of phrase that was like particularly weird or odd or they had something that was like the weather may still be cold outside, but the potential falling of high interest rates over the next few months. And I'm just like,

Wow. Jesus Christ. Someone was a theater major that was in the Fed. Yaz, what are you keeping tabs on? So last week, a new personal hero of mine was discovered, born. Her name is Miriam Mashiri. She's a BBC presenter, and she was counting herself down on air and accidentally flipped the bird at every viewer in the UK. Okay.

I saw this. I saw this on your Instagram stories, which you should follow us on Instagram at Yassie G on Instagram if you want to see some great content. She's just become one of my favorite people. I've never felt more close to someone because I know that's what would happen to me on air. And

That's why we do an audio medium. Listeners, you can't see it right now, but Yaz just has two birds, double birds out right now. I have been told by relatives that I swear too much on this podcast. I feel like you don't swear enough on this podcast. Yeah, fuck that shit.

I love you, Miriam. I hope you didn't get any sanctions at your job. And I look forward to seeing you on my screen again. And that's it for Most Innovative Companies. Adam, thank you so much for joining us. Thank you. It was a pleasure. Our show is produced by Avery Miles and Blake Odom, mixed and sound designed by Nicholas Torres, and our executive producer, Josh Christensen. Remember again to subscribe, rate, and review, and we'll see you next week.