WeightWatchers enters Ozempic market with telehealth deal

Sequence is a subscription service that offers telehealth visits with doctors who can prescribe the drugs. WeightWatchers, which has long promised to help customers lose weight through food tracking and lifestyle changes, is moving to also offer customers a medical approach to weight loss.

“This is the biggest innovation in our industry today,” said WW CEO Sima Sistani of the new drugs. “There’s real excitement about the health outcomes of these drugs.” Ms. Sistani, who has been CEO since 2022, noted that there are also concerns that people taking these drugs need support to make changes to their diet and exercise regimen as well.

Sequence, whose company name is Weekend Health Inc. started in 2021 and has gathered about 24,000 members as of February. WW says it will pay a net purchase price of $106 million, and the deal is expected to close in the second quarter of 2023.

WW plans to promote Sequence’s telehealth services to WeightWatchers members. Gary Foster, Chief Scientific Officer of WW, says WeightWatchers plans to create programs tailored to people on weight-loss drugs, emphasizing strength training and consuming protein-rich foods, as when people lose weight, they often make important lose muscle mass. .

Sequence members pay $99 per month for services, including telehealth appointments with doctors, who can prescribe Ozempic, Wegovy, Mounjaro, and other weight loss drugs. Sequence’s program includes a weight loss tracking app and meetings with dietitians and fitness coaches. Potential subscribers first take a short quiz asking about height, weight and about certain medical conditions.

Drugs like Wegovy and Ozempic work by acting like GLP-1, a naturally occurring hormone that stimulates insulin production and slows stomach emptying, helping users feel fuller for longer. People with a body-mass index of 30 or higher who took semaglutide, the active ingredient in Wegovy and Ozempic, lost an average of about 15% of their body weight weekly after taking the drug for 17 months, according to a study published in 2021 in the New England Journal of Medicine. Journal of Medicine.

The drugs have recently been the subject of online celebrity testimonials and have exploded in popularity, leading to a drug shortage.

Wegovy is approved by the Food and Drug Administration to treat obesity and Ozempic is approved for diabetes. The FDA approval for Wegovy indicates that the drug is intended for people with a BMI of 30 or more, or a BMI of 27 or more plus at least one weight-related condition such as high blood pressure, high cholesterol or type 2 diabetes.

Some digital health companies have come under fire for promoting the drugs as a quick way to lose weight for people who are not obese and do not have diabetes. The drugs can cause side effects, including nausea and vomiting.

WW says it sees the new obesity and diabetes drugs as a complement to existing offerings, including the cornerstone eating plan, where users track what they eat and drink and aim to stay within a certain number of daily “points.”

“We have no interest in prescribing drugs for those trying to lose 10 pounds for a reunion,” said Dr. foster. He says WeightWatchers members lose an average of 5% to 6% of their body weight in six months.

WW said it would pay $106 million in a combination of cash and stock for the deal: $65 million in cash and $35 million in newly issued WW common stock at closing, and $16 million in cash at the closing of the transaction. the first anniversary and $16 million in cash on the second anniversary. WW will take over $26 million in Sequence’s cash.

The Sequence deal comes after several turbulent years with the company. In 2018, WeightWatchers shifted its tight focus on weight loss by changing its name to WW and largely ending the use of the word “diet” — in favor of a broader wellness approach. The company launched and later scaled back several initiatives, including personalized diet plans that many members found confusing. The company’s membership and share price fell.

When Ms. Sistani, who came from the tech industry and was the founder of social networking app Houseparty, joined the company, she supported the company’s mission to lose weight.

“We started embracing WeightWatchers again because I think it’s important not to shy away from the weight loss conversation as important for health outcomes,” she said.

Also on Monday, WW reported that it turned to a net loss of $32.5 million or 46 cents per share in the fourth quarter ended December 31, 2022, from a net profit of $29.9 million or 42 cents per share in the same quarter a year ago. Revenue was down 18.8% to $223.9 million from $275.8 million in the same quarter last year. The number of subscribers fell from 4.2 million to 3.5 million.

Write to Andrea Petersen at andrea.petersen@wsj.com

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