In order to move ahead of the challenge to its well-known weight reduction business model and to provide access to prescriptions for new blockbuster weight loss medications, WeightWatchers purchased Sequence this spring. Rival Noom has taken a similar tack.
According to a statement released alongside company earnings on Wednesday, which caused WW shares to drop by as much as 25%, Oprah Winfrey, who had joined the company program, acquired a sizable stake, and also became a board member in 2015, is leaving the executive position in May. Diet and exercise are still crucial for patients using these new drugs, but the market isn’t convinced that WW’s brand will succeed in the new era of weight management.
Despite the FDA’s mandate that patients be prescribed these so-called GLP-1 drugs only in conjunction with diet and exercise regimens, there is a very large risk associated with new weight loss medications like Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound, despite all of the promise they hold for treating obesity.
With more of these medications about to hit the pharmacy scene and employer-based insurers still in the early stages of expanding employee coverage, the surge in these medications is only beginning.
Given that obesity is now more often treated like a chronic illness requiring medication, does it present WeightWatchers with an existential threat unlike anything it has encountered in its history, or is it the best chance the company has seen in a long time to revitalize its business model?
The company required the move that WW CEO Sima Sistani took in March when she acquired Sequence, which is now WeightWatchers Clinic, to get the company into the clinicals market. Sistani was named to the first CNBC Changemakers list on Wednesday.
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