WW International announced late Monday that it's acquiring subscription telehealth platform Sequence, thereby entering the obesity drug prescription business. WW stock rocketed Tuesday.
The weight management company, formerly WeightWatchers, said it's acquiring Sequence for a net purchase price of $106 million.
The takeover will complement WW's programs for weight loss during a time when demand for obesity drugs, such as Ozempic and Wegovy, is growing rapidly.
Morgan Stanley analysts expect the market for obesity drugs to reach $54 billion by 2030. That would be up from $2.4 billion in 2022.
"As science advances rapidly, we know there is a significant opportunity to improve outcomes for those using medications," WW International CEO Sima Sistani said in a statement.
The company expects the transaction to close during the second quarter of 2023.
WW Stock
Shares surged 30% to 5.02 on the stock market today. WW stock closed near session lows Monday. The stock has plunged from a June 2018 high above 105.
Launched in 2021, Sequence serves about 24,000 members across the U.S. and has roughly $25 million in annual revenue run rate.
The subscription service offers telehealth visits with doctors who can prescribe obesity drugs. Those drugs are manufactured by names including Novo Nordisk and Eli Lilly.
Also on Monday, WW International announced mixed fourth-quarter results and gave weak Q1 revenue guidance.
