Key Considerations for Acquirers Entering the Peptides and Wellness Business

The market for peptide-based therapeutics and consumer wellness products – including weight-management peptides, growth-hormone secretagogues, as well as "longevity" and recovery-focused peptide regimens sold through medical spas, telehealth platforms and compounding pharmacies – has attracted significant strategic and private equity interest. Acquirers evaluating targets in this space, however, are entering a sector where the regulatory perimeter is unsettled and shifting, and where diligence gaps can translate directly into post-closing liability.

A recent Holland & Knight alert (see "Medical Spa Compliance Under the Microscope," August 5, 2026) discussed regulatory enforcement activity in the aesthetics and wellness industry. This follow-up alert summarizes the principal legal and regulatory issues that acquirers should consider when evaluating, structuring and documenting a peptides or wellness transaction.

Regulatory Classification of the Target's Products

Because peptides are primarily regulated as drugs, the starting point for diligence is determining how each product in the target's portfolio is regulated, as that drives every downstream compliance question.

• Drug vs. Dietary Supplement Status. Most peptides marketed for injection or with claims such as weight loss, muscle growth, tissue repair or anti-aging are often treated by the U.S. Food and Drug Administration (FDA) as drugs requiring approval, not dietary supplements under the Dietary Supplement Health and Education Act(DSHEA). Acquirers should confirm whether any product in the pipeline is an unapproved new drug and assess the resulting enforcement exposure.
• Compounding Pathway and the Bulks List. Many peptide products reach consumers through compounding pharmacies operating under Sections 503A or 503B of the Federal Food, Drug, and Cosmetic Act. Compounding is permitted only for substances on FDA's applicable bulk drug substances lists (or that meet other statutory criteria), and FDA has removed or declined to add several popular peptides from these lists in recent years. FDA review is ongoing and addition to the bulk list is not automatic, as discussed in a previous Holland & Knight alert (see "FDA Advisory Committee Endorses Compounding of Certain Peptides," August 4, 2026). Because a delisting can eliminate a product line overnight, diligence should confirm the current listing status of each compounded peptide on which the target sells or relies.
• Prior FDA Warning Letters and Enforcement History. Acquirers should review whether the target, its suppliers or its compounding pharmacy partners have an FDA enforcement history, including FDA Form 483s, Warning Letters, Untitled Letters or Import Alerts. Acquirers should review how these enforcement matters have been resolved.
• Research Use-Only (RUO) Labeling. Some peptide suppliers label products "for research use only" or "not for human consumption" while marketing or distribution channels suggest otherwise. This mismatch between labeling and actual use is a frequent basis for enforcement and should be treated as a red flag rather than a compliance solution.

State Licensing, Pharmacy and Telehealth Considerations

Because peptide products are frequently dispensed through prescriber-and-pharmacy models, state law issues can be as significant as federal ones.

• Pharmacy and Compounding Licensure. Confirm that any affiliated or third-party compounding pharmacy holds current state board of pharmacy licensure (including nonresident/out-of-state licenses where the pharmacy ships across state lines) and has a clean inspection and disciplinary history. Additionally, confirm that each compounded product has a current legal basis for compounding – particularly for GLP-1 products, which may no longer be eligible for mass compounding following the FDA's removal of semaglutide and tirzepatide from the drug shortage list.
• Corporate Practice of Medicine and Fee-Splitting. Many wellness and medical spa businesses rely on management services organization (MSO) structures to comply with state corporate practice of medicine and fee-splitting restrictions. Acquirers should scrutinize whether the MSO arrangement is properly documented and defensible under the law of each state in which the target operates, since an unwind of a noncompliant structure can be costly. Acquirers should assess whether state transaction review laws will require advance notice or review of a potential transaction.
• Telehealth Prescribing. If the target originates prescriptions through telehealth intake, confirm compliance with state telehealth practice standards, informed consent and medical necessity requirements, and any applicable controlled substances or in-person examination requirements.
• Medical Director and Standing-Order Arrangements. Where nurse practitioners or physician assistants administer peptide injections under a medical director's standing orders, confirm the scope-of-practice rules and supervision requirements of each state involved. Confirm that your medical director provides genuine, active clinical oversight, not merely a signature on a contract.

Advertising, Marketing and Consumer Protection Exposure

Peptide and wellness marketing is a frequent target of Federal Trade Commission (FTC) and state attorney general scrutiny, given the prevalence of health and efficacy claims.

• Substantiation of Health Claims. Confirm that claims regarding weight loss, muscle gain, anti-aging or other outcomes are supported by competent and reliable scientific evidence, consistent with FDA and FTC substantiation standards, particularly where claims are disease-related.
• Influencer and Endorsement Marketing. Review social media and influencer campaigns for compliance with FTC endorsement disclosure guidance as well as relevant FDA rules, as this channel is heavily used in the wellness sector and is an active enforcement priority.
• Automatic Renewal and Subscription Practices. Many wellness businesses use subscription billing for recurring peptide or supplement shipments; confirm compliance with state automatic-renewal laws and the FTC's negative-option rules.
• Marketing Consent. Ensure the target company has obtained the necessary authorizations and consents for marketing communications and has implemented clear opt-out mechanisms.

Manufacturing, Supply Chain and Quality Diligence

Product quality and sourcing issues are a leading cause of recalls, litigation and reputational harm in this sector.

• API Sourcing and Country-of-Origin Risk. Peptide active pharmaceutical ingredients (APIs) are frequently sourced from overseas manufacturers and suppliers. Diligence should map the supply chain, confirm current good manufacturing practice status of manufacturing sites and assess concentration risk with any single supplier. Confirm that all pharmaceutical products are sourced exclusively from authorized distributors to guard against risk of obtaining counterfeit, unauthorized or improperly compounded products.
• Testing and Purity. Confirm the target's protocols for third-party testing of identity, purity, sterility (for injectables) and endotoxin levels, and review any history of contamination, mislabeling or recall. Verify compounded medications are obtained exclusively from properly registered 503A or 503B pharmacies that comply with applicable sterile compounding standards.
• Cold-Chain and Logistics. Many peptides require refrigerated storage and shipping; assess whether the target's logistics and its distributors maintain adequate cold-chain controls.

Intellectual Property

• Patent Landscape. Assess freedom to operate against composition-of-matter and method-of-use patents covering the specific peptide sequences, analogs and delivery formulations the target sells, particularly for peptides analogous to approved GLP-1 and growth hormone-related drugs.
• Trademarks and Brand Clearance. Confirm clearance and registration status of consumer-facing wellness brand names and review any cease-and-desist correspondence regarding branding or claims.
• Trade Secrets and Formulation Know-How. Where the target's value is tied to proprietary formulations or dosing protocols, confirm that appropriate confidentiality and assignment agreements are in place with founders, chemists and compounding partners.

Product Liability, Litigation and Insurance

• Litigation History. Review any product liability claims, adverse event reports or class action exposure relating to peptide products, including claims tied to unapproved or misbranded products.
• Insurance Coverage. Confirm the scope and adequacy of the target's product liability, recall liability, professional liability (for prescribers and injectors) and cyber/data insurance, as well as evaluate the availability and cost of representations and warranties or contingent liability insurance to address regulatory uncertainty identified in diligence.

Data Privacy and Health Information

• Applicability of HIPAA. Determine whether the target or its clinical partners qualify as Health Insurance Portability and Accountability Act (HIPAA)-covered entities or business associates, and, if not, whether the health and wellness information it collects is nonetheless subject to state consumer health data laws (such as Washington's My Health My Data Act and similar state statutes) or the FTC Health Breach Notification Rule.
• Consent and Data Use in Marketing. Confirm that consent mechanisms for using patient or customer health data in marketing, retargeting and analytics comply with applicable privacy laws, as this is an active area of state enforcement in the wellness and telehealth space.

Deal Structuring Implications

Regulatory and compliance findings from diligence should be reflected directly in transaction documents rather than addressed only through general representations.

• Tailored Representations and Warranties. Rather than relying solely on general "compliance with laws" language, include specific representations addressing FDA compliance, state pharmacy and medicine compliance, bulk drug substance listing status, absence of warning letters, physician supervision and MSO/corporate-practice-of-medicine structuring.
• Indemnification and Survival. Consider longer survival periods and specific indemnities for regulatory matters identified in diligence, particularly where a product's continued legality depends on FDA listing decisions outside the target's control.
• Escrows and Holdbacks. Where a material product line depends on an unresolved regulatory question (for example, pending bulk drug substance nomination decisions) or may be excluded from representations and warranties insurance (RWI), consider an escrow or contingent purchase price mechanism tied to resolution of that question.
• State Transaction Review, Change-of-Control and Licensure Transfer. Confirm whether state transaction review laws may be triggered – as well as whether pharmacy licenses, medical director agreements and payer or platform agreements require consent to assignment or are otherwise affected by a change of control – and build any necessary consents and their timing into the closing conditions.
• Post-Closing Integration Planning. Where the acquirer intends to expand the target's product line or geographic footprint, confirm early whether the expanded footprint introduces new state licensure or telehealth compliance obligations that were not previously in scope.

Key Takeaways

The peptides and wellness sector offers significant growth opportunity, but the regulatory framework governing these products is fragmented across FDA drug and compounding law, FTC regulations, state pharmacy and medical practice law, state transaction review law and consumer protection law – a landscape that continues to evolve.

Acquirers are best served by front-loading regulatory diligence – including a product-by-product classification analysis and supply chain review – and by ensuring that the purchase agreement allocates the risks specific to this sector rather than relying on standard-form representations designed for more conventional healthcare or consumer products transactions.

For additional information or questions about a specific matter pertaining to your organization, contact the authors.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.