Controversial yet resilient, Eucalyptus eyes $8 million employee share sale

Digital health startup Eucalyptus is on the eve of an $8 million share sale that is set to benefit long-serving employees.

This news, originally reported in the Australian Financial Review (AFR), comes shortly after the company began offering a generic version of the highly popular, and controversial, Ozempic —  a diabetes medication touted as a weight loss treatment.

It’s been reported that the majority of the shares will be sold to an undisclosed overseas investor and that some of the shares will be made up of CEO Tim Doyle’s personal holdings — as well as those of his co-founders and early employees.

Doyle told the AFR that he will only be selling one percent of his own shares and that he takes pride in presenting a return to long-term staff.

Despite facing challenges with regulators and criticism from medical groups and drug manufacturers, Eucalyptus has maintained a steady valuation. Tim Doyle told the AFR that it continues to be valued at close to the $560 million mark established in its most recent capital raise back in May.

Employee and founder share sales are having a moment of late. Australian unicorns Canva and SafetyCulture are closing in on their own secondary sales, with the former pegged to bring in $2.28 billion.

According to the AFR, Eucalyptus has engaged in a share split since last year and the $8 million worth of stock will sell at a somewhat cheaper rate due to the contracts involved.

Eucalyptus – which operates online health brands such as Juniper, Pilot, Software, and Kin – has grown its reputation for providing weight loss medications, among other health services.

The company, which was founded in 2019, has recently expanded its offerings by selling a chemist-made version of Ozempic’s active ingredient, amidst global shortages of the original drug. This decision stirred controversy among healthcare professionals and Novo Nordisk, the manufacturer of Ozempic, who raised concerns about the testing and safety of the alternative product.

Despite these challenges, Eucalyptus’s latest financial move is a testament to its growth and resilience in the digital health sector. The company has attracted significant investments, including $50 million in its latest funding round, with contributions from Blackbird Ventures, BOND Capital, and Woolworths’ W23 venture arm.

These investments have bolstered the company’s suite of digital health services, catering to various demographics through brands focusing on men’s health, fertility support, women’s weight loss, sexual wellness, and prescription skincare.

Eucalyptus’s journey hasn’t been without its hurdles. In mid-2022, the company faced setbacks, including the need to cut a significant number of staff due to financial constraints. There have also been questions relating to the marketing strategy and prescription model of weight-loss product Juniper. Eucalyptus’s clinical director defended the advertising campaigns, saying they were in line with Australian law.

As Eucalyptus continues to navigate its corner of the digital health and telemedicine landscape, its recent share sale and continued investor support indicate a strong belief in its potential to ‘revolutionise’ healthcare access and delivery, despite the ongoing challenges and criticisms it faces.