WeightWatchers Latest Strategic Acquisition: Simplify Insurance Reimbursement For Costly Weight-Loss Drugs

WW International, Inc WW or WeightWatchers snapped telemedicine company Sequence in March after scanning through 30 different startups that prescribe obesity medications, CEO Sima Sistani said.
Sistani credited Sequence for building a superior tech stack in Thursday's Bloomberg Radio interview.
Sequence's preauthorization engine helped ease the challenges of health insurance reimbursement for the costly obesity drugs, Sistani said.
In March, WeightWatchers disclosed plans to scoop Weekend Health Inc's consumer brand Sequence for a cash and stock deal valued at $132 million over two years.
Sequence prescribes a crop of highly effective new obesity drugs known as GLP-1s, which mimic a satiety hormone to help people eat less.
WeightWatchers will continue offering its signature weight-loss program alongside the new offering.
The popularity of Novo Nordisk A/S's NVO Ozempic and Eli Lilly And Co's LLY Wegovy among celebrities and on social media was pivotal in creating a crowded market for prescribing them.
Dozens of digital platforms like Sequence have emerged to offer the drugs to patients, often providing prescriptions alongside coaching or other support for lifestyle changes like improvements to diet and exercise.
"The benefit of the combination with WeightWatchers is when it's not medically appropriate, we have ways to push those members to WeightWatchers, and vice versa," Sistani said.
This week Goldman Sachs analyst Jason English upgraded WeightWatchers from Neutral to Buy and raised the price target from $3.80 to $13, citing the company's new obesity drug on-ramp solution.
English noted that if WW can grab just 3% of the total addressable market in the U.S., it could add $2 to its bottom line.
Yet one influential fund manager does not agree with Goldman Sachs. Gary Black, managing partner of The Future Fund — the firm behind the Future Fund Active ETF FFND — said that Goldman Sachs' thesis implied Weight Watchers members will pay Sequence $90 a month to get access to drugs such as Wegovy and Mounjaro when the average member today pays a monthly $23.
The fund manager said his firm would take the opposite stance, shorting WW stock, an action is done when fund managers expect the price of a stock to decline over time.
Price Action: WW shares traded lower by 0.68% at $7.30 premarket on the last check Friday.

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