WeightWatchers Sees Continued Growth as Analysts Highlight Impact of Enhanced Wegovy Version

Shares in WeightWatchers experienced a significant increase of nearly 38% in after-hours trading on Wednesday, building on the sharp gains from the previous session. This surge follows the company’s announcement that it will provide a compounded version of Novo Nordisk’s popular weight-loss drug, Wegovy.

Major pharmaceutical companies, including Denmark’s Novo Nordisk and Eli Lilly, have faced challenges in meeting the rising demand for their blockbuster GLP-1 obesity medications, which have been proven to help patients lose an average of up to 20% of their weight.

Due to this shortage, U.S. regulators have permitted businesses, including telehealth companies, to produce compounded versions or close replicas of brand-name drugs. This process involves combining or altering drug ingredients to create medications tailored to the specific needs of individual patients, according to the U.S. Food and Drug Administration.

In its announcement, WeightWatchers, officially known as WW International, stated that the price for its compounded offering would begin at $129. Chief Executive Tara Comonte emphasized the company’s commitment to ensuring that members have access to effective alternatives amid ongoing shortages of Novo’s Wegovy and Ozempic.

WeightWatchers’ shares saw a surge of over 46% on Tuesday, and analysts at Morgan Stanley commented that the company’s entry into the compounded GLP-1 market was a crucial step toward revitalizing clinical growth, especially after recent struggles in its exclusively branded segment. They noted that while it may not be too late for WeightWatchers to regain market share, successful execution of the new offering would be vital as peak demand season approaches.

This announcement follows a recent statement from the FDA indicating that tirzepatide, the medication marketed by Eli Lilly as Zepbound for weight loss and Mounjaro for diabetes, is no longer experiencing a shortage in the U.S., lifting a classification that had been in place since 2022. However, Wegovy and Ozempic continue to appear on the FDA’s shortage list.