Drugmakers that found promising cures for the obesity epidemic saw their stocks richly rewarded. Now investors are turning their attention to a new crop of companies tackling a more purely aesthetic problem: baldness.

Pattern hair loss affects an estimated 50 million men and 30 million women in the US, yet the treatment landscape has been frozen for nearly three decades: no new drugs have been approved for the condition since the late 1990s, when finasteride and topical minoxidil — both still the standard of care — cleared regulators. The promise of novel treatments has sent shares of Veradermics Inc., which trades as "MANE," up nearly 500% since the company went public in February, while Absci Corp.'s stock has more than doubled so far in 2026. Cosmo NV has also reported positive results for an experimental male hair-loss treatment, though its Zurich-listed shares have been weighed down by the success of US competitors.

Patients who are ineligible for hair transplant surgery — or cannot afford it — currently have two main options: over-the-counter topical minoxidil, the active ingredient in Rogaine, or prescription finasteride, branded as Propecia. Both can come with debilitating side effects; minoxidil is linked to heart palpitations, while finasteride is known to lower sex drive. Wall Street views new treatments as an untapped goldmine full of consumers willing to pay out of pocket for better options, in a dynamic reminiscent of the boom in GLP-1 weight-loss drugs.

"People will fly all the way to Turkey to have some hair moved around on their head," said Needham analyst Gil Blum, who rates Absci a buy. "Can you imagine if you could do that without getting a hair transplant?"

Drugmakers and investors alike are hoping for a repeat of the weight-loss drug successes that vaulted Eli Lilly & Co.'s market value across the $1 trillion threshold and made Novo Nordisk A/S, briefly, the most valuable company in Europe.

One of the closest treatments to market is Cosmo's topical medicine, clascoterone, which targets the root cause of male-pattern hair loss by blocking the hormone that drives it directly at the hair follicle. The company says the treatment could be the "single biggest opportunity" in its portfolio and plans to submit a new drug application to US regulators in the first quarter of 2027. Clascoterone 5% topical solution leverages the same active ingredient used in Winlevi, Cosmo's acne treatment product — an already FDA-approved drug, which gives the program a established safety and manufacturing foundation.

While the new medicines are likely more than a year away from reaching US shelves, analysts expect Cosmo shares to nearly double over the next 12 months. Jefferies analysts estimate sales for Cosmo's male hair-loss therapy could reach $3 billion globally, "assuming a capable commercial partner is successfully found." The brokerage said the company may find a partner before the year is over, which could help bolster the share price.

As with obesity drugs, there is room for more than one winner. Analysts tracked by Bloomberg are universally bullish on both Cosmo and Veradermics.

"This space definitely can accommodate multiple drugs," said Jefferies analyst Roger Song, who holds the Street's highest price target on Veradermics. "Many hair loss patients tend to use multiple drugs, either prescription or over-the-counter — as long as they can afford it — because it's a cash-pay market."

Veradermics announced positive results in April for its lead candidate, a tablet formulation of minoxidil, in male-pattern hair loss. The company also reported promising mid-stage data in July for women with thinning hair. If it wins approval from the Food and Drug Administration, the drug could become the first approved pill for female-pattern hair loss — a segment with essentially no approved pharmaceutical options today beyond topical minoxidil.

Absci, meanwhile, is developing its early-stage drug candidate ABS-201, an AI-designed injection to treat pattern hair loss. The firm expects interim data in the second half of this year, one of the nearest-term catalysts investors are watching across the space.

"Both obesity and hair loss are large consumer markets and that's one reason why both of those categories can offer significant revenue potential," said OrbiMed's Geoff Hsu, portfolio manager of the Biotech Growth Trust Plc, in an interview. "If you do find a safe and efficacious drug for hair loss, that would unlock a significant addressable market."

Drug development, of course, is high risk, with the potential for big returns counterbalanced by products and companies that flop. Before GLP-1s won over insurers and consumers alike, a whole generation of obesity drugs failed to reach blockbuster status; some instead went to bankruptcy court.

There is also a major difference from weight-loss drugs: going bald is not a health crisis. GLP-1s, as a weapon in the battle against obesity, were able to secure insurance coverage while also attracting consumers primarily interested in meeting modern beauty standards. Hair-loss drugs are likely to remain out-of-pocket expenses for consumers, but many in the industry remain upbeat about future sales.

"If you can make it easier on the patient — that is pain-free and simple like taking a pill — I think it opens a whole new avenue of potential patients to treat," said Ryan Isherwood, who with his wife owns three Gameday Men's Health clinics in Wisconsin.

Despite high-flying valuations and the risk of failure, analysts remain upbeat about the room for future gains.

"This is a zero or hero story. I would buy it now because it's still cheap," Needham's Blum said of Absci.

This story was originally featured on Fortune.com.