WW International (WW), better known as Weight Watchers, this week made the fifth acquisition in the company's 60-year history of telemedicine and medical prescription startup Sequence.
The move opens the door for traditional weight-loss programs to enter a new hot area in which chronic disease drugs are used to lose weight.
The popularity of drugs like Novo Nordisk's (NVO) Ozempic and Wegovy, as well as Eli Lilly's (LLY) Mounjaro, could help boost the company's membership numbers as it looks to offer these drugs, which are commonly used to treat diabetes. Medications that have been shown in clinical trials to help with weight loss in addition to controlling the disease.
WW CEO Sima Sistani told Yahoo Finance that the move is not a departure from the traditional program's core belief of changing behavior and diet with community support.
“The Weight Watchers you know and love won't go anywhere. It's an ‘and,' not an ‘or,'” Sistani said of the move into clinical services.
However, she acknowledges that in some cases, “willpower alone is complicated. Because of genetics and biological, environmental, socioeconomic[factors].”
In recent years, the health industry has searched for the root causes of obesity in certain populations, citing lack of access to fresh or healthy food as one possibility and inability to afford such food as another.
With the breakthrough of new injectable drugs for chronic management — and their prevalence leading to shortages affecting people with diabetes — Sistani saw an opportunity to leverage the company's brand to become the go-to source for drug users.
“This represents a paradigm shift for our industry, and we think it's important to address this with a full-stack solution. No one else can do what we can. When you get a (prescription) for these drugs, the medical advice is the same as Lifestyle behavior change programs together. As you know, we are the #1 physician-recommended behavior change program,” Sistani said on a recent earnings call.
She told Yahoo Finance that the company will prescribe it according to FDA guidelines.
“These drugs aren't for everyone. I think there's a lot of misinformation and misuse of it as if you're going to lose 10-20 pounds and get back together. That's not the proper use for these drugs,” she said, suggesting more More and more celebrities admit they use the drug.
“These are not ‘diet pills,' these are long-term weight management prescriptions to help you cope with overweight and obese living conditions,” Sistani added.
She also noted that the company “is in the subscription business, not the prescription business.”
Sistani emphasized that under FDA guidelines, the company only allows the drug to be prescribed to people with a body mass index (BMI) over 30 or people over the age of 27 who have comorbidities (chronic diseases). As the drug grew in popularity, more insurance companies started covering it, allowing more people to get it.
“Now that supply chain challenges are being addressed, more insurance plans that cover these drugs are expected to increase access. Chronic weight management drugs should only be prescribed as an adjunct to behavioral lifestyle changes,” the FDA said. However, already There is a lack of holistic care that works with these drugs. They are not a panacea,” Sistani said by phone.
But it won't be a quick turnaround. Sistani noted on the call that building verticals takes time and that there will be a learning curve in how to integrate the drug with a member's weight loss journey.
The company has done so amid the emergence of new tech-based weight-loss startups and more do-it-yourself resources than ever before — leading to a decline in subscribers in recent years.
But Sistani said the company's size is its biggest strength. WW International has established relationships with corporations, insurance companies, and has clients such as New York City and the Cleveland Clinic as business partners. That's something startups are still trying to build, Sistani said.
“It's a real OG social network, and this is how people connect around experiences of vulnerability,” she told Yahoo Finance.
“Our first consideration is the long-term health of the company, not the stock price,” Sistani added.
Instead of transforming, she insists, the company is offering services around new science and technology.
This includes providing platforms to ensure that anyone who needs access to medication can do so with the help of WW management working with insurance companies. But in the end, the cost of prescription drugs — reportedly more than $1,000 a month in some cases — will be borne by patients, depending on whether their insurance company covers them.
Follow Anjalee Twitter @AnjKhem
Click here for the latest stock market news and in-depth analysis, including events affecting stock movements
Read the latest financial and business news from Yahoo Finance
