WeightWatchers gets into prescription weight loss business

WeightWatchers soared Tuesday after the corporate mentioned it was entering into the prescription drug weight reduction business with the acquisition of Sequence.

Sequence, a telehealth operator, says that its specialists can prescribe medicines beneath model names together with Ozempic, Wegovy and Trulicity.

Shares of WW International Inc. jumped practically 29% on the opening bell.

WeightWatchers provides subscribers meal plans with the purpose of shedding extra weight. With the acquisition of Sequence, the corporate is tapping right into a red-hot marketplace for pharmaceuticals that addresses weight problems, and broadening what it provides to prospects.

“It is our responsibility, as the trusted leader in weight management, to support those interested in exploring if medications are right for them,” mentioned CEO Sima Sistani mentioned in a ready assertion late Monday.

Ozempic, also called semaglutide, works by stimulating the physique’s personal insulin manufacturing and lowering urge for food. While it’s prescribed for diabetes, Ozempic can even assist individuals reduce weight.

If it isn’t handled, weight problems can result in lifelong well being issues, together with hypertension, diabetes and despair.

“This deal brings access to prescription drug solutions for weight loss to WW’s historical focus on behavior modification model,” wrote UBS analyst Michael Lasser. “This is a significant change in the business. While the deal could bring considerable upside, it also carries sizable risks,”

Lasser mentioned that WW’s business has been disrupted over the past a number of years and is now attempting to take huge steps to course appropriate. “We think it will take time to see if this action really produces a change in the company’s fortunes,” he mentioned.

WW International, Based in New York City, can pay US$106 million for Sequence, which served about 24,000 members throughout the U.S. as of February, with annual income of about US$25 million.

The acquisition is anticipated to shut within the fiscal second quarter.