WeightWatchers Announces New Low-Cost Weight Loss Drug

Shares of WW International Soar

WW International, also known as WeightWatchers, saw its shares surge by up to 27% on Tuesday morning. This followed the company's announcement of a new, affordable weight-loss drug. The new product is essentially a replica of Novo Nordisk A/S's Ozempic and Wegovy.

New Low-Cost Treatment to Combat Obesity

WeightWatchers has added a new compounded semaglutide to its product range in a bid to combat the obesity crisis in America, largely attributed to the processed foods industry. The new treatment is priced at $129 for the first month, with subsequent months costing $189. This is significantly cheaper than GLP-1 obesity treatments from major pharmaceutical companies, which can cost over $1,000 a month.

WeightWatchers Aims to Offer Accessible and Affordable Solutions

Tara Comonte, Interim CEO of WeightWatchers, stated that the company has always combined proven science with personalized support to help its members achieve lasting results. The addition of compounded semaglutide expands the company's offerings to include a clinical weight management solution that is both accessible and affordable. This new product launch is the result of extensive research and hard work by the WeightWatchers team, aimed at providing high-quality care and reinforcing the trust the company has built over six decades as a leader in weight management.

Addressing Shortages of Wegovy and Ozempic

WeightWatchers' move towards a low-cost GLP-1 obesity treatment comes amidst ongoing shortages of Wegovy and Ozempic, produced by Novo Nordisk. Comonte emphasized that WeightWatchers is committed to ensuring its members have access to effective alternatives and the support they need to achieve their health goals, despite these shortages.

Compounded Semaglutide: An Affordable Weight Loss Solution

According to Food and Drug Administration rules, compounding pharmacies can produce drugs that are in short supply. WeightWatchers has contracted with an FDA-registered 503B facility to manufacture its compounded semaglutide. Dr. Jamil Alkhaddo, Medical Director of WeightWatchers, believes that compounded semaglutide can be a viable option for those seeking weight loss support, given its greater availability and affordability.

Insurance Coverage Challenges

WeightWatchers noted that approximately 45% of its members who were prescribed GLP-1 medications in the past six months were denied insurance coverage after three prior authorization attempts. With less than 40% of insurers covering GLP-1s for weight loss, many individuals with obesity are unable to afford Novo's $1,000-a-month treatment, particularly in the current economic climate of high inflation and interest rates.

WW Shares on the Rise

Despite a disappointing year, with shares down 88% following lackluster quarterly results and a restructuring plan announcement, WeightWatchers' shares rose 27% by late morning. A large bear position has been built in WeightWatchers since early 2023, with the float being 18% short, equivalent to about 13.8 million shares.

Bottom Line

WeightWatchers' move to introduce a low-cost weight loss drug is a significant step in making obesity treatment more accessible and affordable. It is a strategic response to the ongoing shortages of branded medications and the high cost of existing treatments. However, the question remains: Will this new product be the turning point for WeightWatchers' struggling shares? What are your thoughts on this development? Share this article with your friends and let's get the conversation started! Don't forget to sign up for the Daily Briefing, delivered every day at 6pm.