Why Is Wellness Company Medifast Stock Trading Lower Today?

Virtual primary care services provider LifeMD Inc LFMD announced a strategic alliance with Medifast Inc MED, the health and wellness company known for its habit-based and coach-guided lifestyle solution OPTAVIA. 

As part of the agreement, Medifast has invested $20 million into LifeMD, including $10 million in contributions to support the collaboration, funding enhancements to the LifeMD platform, operations, and infrastructure, and a $10 million purchase of LifeMD's shares.

Medifast discontinues quarterly cash dividends, effective immediately.

"Discontinuing the dividend provides the flexibility needed to continue evolving our model as we enter an exciting new chapter for our independent OPTAVIA Coaches, customers, employees, and stockholders," said Dan Chard, Chairman and CEO of Medifast.

Under the terms of the agreement, Medifast will utilize LifeMD's virtual care technology platform to provide OPTAVIA Clients access to a clinically supported weight management program, including GLP-1 medications.

This collaboration further establishes LifeMD in a market projected to reach $100 billion by 2030. 

In addition, LifeMD can offer its patients an independent OPTAVIA Coach and other lifestyle support services as part of its weight management program.

Medifast and LifeMD agreed to collaborate following a pilot program focused on providing personalized support centered on holistic health rather than weight loss alone. 

OPTAVIA offers products and a framework for habit creation reinforced by 47,100 active earning coaches.

Price Action: LFMD shares are down 6.30% at $7.59, while MED stock is down 11.7% at $66.59 on the last check Wednesday.