WeightWatchers is stepping out of 1990s strip malls and into the remote prescribing age by snatching up Sequence, a digital health platform for clinical weight management.
The well-known weight loss company has entered into a definitive agreement to acquire Weekend Health, the corporate name of Sequence. Clinicians use the platform to provide clinical care, including prescriptions, for patients navigating chronic weight management. Sequence also claims to help patients traverse the insurance approval process.
“As we build out our clinical weight management pathway, we will be learning and likely tailoring our nutrition program for this distinct member journey,” said Gary Foster, Ph.D., chief scientific officer at WeightWatchers, in a press release. “We know weight management isn’t one-size-fits-all and clinical interventions are not medically or otherwise appropriate for everyone, which is why we remain committed to all pathways.”
WeightWatchers will acquire Sequence in a cash and equity transaction valued at $132 million, inclusive of a minimum of $26 million of Sequence’s cash. The effective net purchase price is $106 million.
Sequence is a subscription service connecting patients with providers who can prescribe weight loss drugs like Ozempic and Wegovy. The move marks an expansion from WeightWatchers’ historical focus on exercise and nutrition programs.
A 2017 study published in the Lancet found that 57% of WeightWatchers members lost weight compared to 42% with similar programs.
“Pairing behavior change with medically appropriate clinical solutions is more powerful and more sustainable than clinical alone,” said Rémi Cossart, CEO and co-founder of Sequence, in a press release. “WeightWatchers is the most studied and trusted behavior change program, and their customer-centric approach to livable, sustainable, science-backed weight management is unparalleled.
WW International stock skyrocketed Tuesday following news of the $106 million acquisition. The stock closed 79% higher on Tuesday, CNBC reported.
The deal is set to be settled by the second quarter of this fiscal year as the weight loss giant solidly places itself to benefit from the growing demand for weight loss drugs.
Ozempic and Wegovy were initially approved by the FDA as diabetes treatments that slows digestion, staving off feelings of hunger. WeightWatchers nodded toward the creation of tailored behavior modification plans including a focus on high-protein foods and strength training for those using weight loss medications.
“WeightWatchers’ nutrition and behavior-change program can provide the support needed to help people build livable healthy habits for the long term and manage the dietary-induced side effects often felt while taking chronic weight management medications, such as glucagon-like peptide-1s (GLP-1s),” Foster said.
While the press release did not directly mention hot weight loss drugs by name, Sequence helps prescribe the GLP-1 agonists, including Wegovy, Ozempic and Rybelsus. These drugs also aid weight loss by stimulating the release of insulin. For this reason, Type 2 diabetics are prescribed the injectable drugs.
GLP-1s reached nationwide notoriety after trending figures like Elon Musk and Chelsea Handler revealed that they had been using related drugs for weight maintenance. Celebrity users have partially been blamed for popularizing the use of the drug and thereby causing nationwide shortages that have affected diabetic care.
Pharmacists have also reported that the drug is too expensive to stock with the average whole price of Ozempic being around $900 while reimbursements net around $860, according to outspoken pharmacists.
Sequence launched in 2021 and has grown to hold an annual revenue of $25 million serving 24,000 members across the country as of last month.
The company boasts that 5,377 members who used the $99 monthly subscription service for at least 26 weeks averaged a 15% loss in weight.
Drugs like Wegovy demonstrated an average 14.9% weight loss reduction when used for 68 weeks, according to a study published in The New England Journal of Medicine. The study found that lifestyle and behavioral therapy alone only led to users experiencing a 3% to 5% drop in weight.
“I am thrilled to be joining the WeightWatchers team following the acquisition to scale Sequence’s clinical weight management offering, in combination with WeightWatchers’ best-in-class behavior change program, to deliver a one-of-a-kind scientifically sound solution to comprehensive care,” Cossart said.