Biotech
Wednesday, February 28th, 2024 5:28 pm EDT
Key Points
- Weight loss drugs like Wegovy and Zepbound are effective but must be prescribed alongside diet and exercise programs, as per FDA regulations.
- The emergence of these drugs presents both an opportunity and a threat to companies like WeightWatchers (WW), which acquired Sequence to enter the clinicals business.
- There are concerns about overreliance on weight loss drugs, emphasizing the importance of lifestyle modifications, and companies like WW and Noom are exploring ways to integrate behavioral changes into their programs.
The article discusses the implications of new weight loss drugs like Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound, which are required by the FDA to be prescribed alongside diet and exercise programs, rather than as standalone treatments for obesity. With more drugs entering the market and insurers starting to cover them, there’s debate over whether this presents an opportunity or a threat to traditional weight loss businesses like WeightWatchers (WW). WW’s CEO, Sima Sistani, made a strategic move by acquiring Sequence, now WeightWatchers Clinic, to enter the clinicals business. Analysts acknowledge the importance of this move but express concerns about WW’s stock performance and market share. The recent decline in the nutrition and diet sector is attributed in part to the rise of weight loss drugs. However, there are risks associated with overreliance on these medications, as they may overshadow lifestyle changes crucial for sustainable weight loss. The cost of these drugs prompts some consumers to opt for cheaper alternatives like compounded semaglutides. Despite the effectiveness of weight loss drugs, lifestyle modifications remain essential. Companies like WW and Noom are exploring ways to integrate behavioral modifications into their programs to complement drug therapy. The business potential lies in connecting patients with clinicians and bridging the gap between prescription and lifestyle changes, offering insurers a cost-effective solution. While weight loss drugs represent a growth opportunity, their impact on the core business of WW and similar companies remains uncertain. The long-term success depends on effectively balancing drug therapy with lifestyle interventions and addressing market dynamics.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/28/the-risky-decisions-youll-need-to-make-once-on-new-weight-loss-drugs.html
