WW International's $132 Million Acquisition of Weekend Health Marks Strategic Entry into Prescription Weight-Loss Drug Market

VCBeat has learned that WW International, Inc. recently announced the acquisition of Weekend Health. Formerly known as Weight Watchers and abbreviated as WW, WW International, Inc. is a company dedicated to helping users achieve natural weight loss through balanced diet and moderate exercise, without relying on external devices or medications.

For nearly 60 years, WW has helped millions of people lose weight by leveraging the latest science in nutrition and behavior change, securing the No. 1 spot on U.S. News & World Report’s “Best Diets for Weight Loss” list for 13 consecutive years. Today, the company is placing a multi-hundred-million-dollar bet on the booming market for prescription weight-loss drugs.

The landmark event in WW’s transformation toward internet-based weight loss was its 2014 acquisition of Wello, a San Francisco-based company. Wello’s distinctive feature is providing one-on-one online coaching guidance. Bullish on the strong prospects of online fitness videos, WW viewed the acquisition of Wello as its first step into the digital health sector.

In 2015, it expanded its online social networking capabilities through the acquisition of Weilo. Weilo’s flagship product was an app that enabled users to document their weight-loss journeys via selfies; integrated into WW’s app, it fulfills members’ needs for interactive social engagement. This acquisition will help WW accelerate the development of products and technologies related to the social networking and community features its members are seeking.

Subsequently, WW also acquired Hot5, a professional online video app. Hot5 Fitness offers staged 5-minute workouts across different levels, covering the full spectrum from amateur to professional training.

Not long ago, WW announced the acquisition of the telehealth platform Weekend Health, enabling the company to enter the chronic weight management sector. Under the terms of the merger agreement, WW will acquire Weekend Health in a cash-and-stock transaction valued at $132 million, including at least $26 million in cash, resulting in an actual net purchase price of $106 million. The transaction is subject to customary closing conditions and is expected to be completed in the second quarter of 2023.

WW has approximately 3.8 million users. The Weekend Health platform, launched in 2021, has around 24,000 members. Weekend Health enables patients to schedule online appointments with clinicians, provides access to nutritionists and fitness coaches, and offers prescription weight-loss medications, including Ozempic and Wegovy. Following the acquisition of Weekend Health, WW will deliver more continuous consumer services, integrate medical advice, and provide prescription weight-loss medications under clinical supervision.

●The “Miracle Drugs” for Weight Loss: Ozempic and Wegovy

Although WW’s fourth-quarter performance was sluggish and user growth stagnated, its stock has been rising steadily since the company announced the acquisition of Weekend Health on March 6, with no signs of slowing down. As of March 7, the share price surged more than 32% in a single day. This acquisition means that consumers will be able to obtain Ozempic and Wegovy through WW, both of which are currently in short supply in the market.

Ozempic and Wegovy are the new weight-loss drugs that have been drawing attention in the healthcare sector in recent months.

In September 2022, Variety magazine described Ozempic as “Hollywood’s secret new weight-loss drug,” touting its popularity among celebrities who found it highly effective for weight loss. Ozempic’s ability to regulate insulin and lower blood glucose levels can help increase satiety. This quickly led to a nationwide shortage of Ozempic in the United States.

The FDA previously approved Ozempic as a treatment for type 2 diabetes, to be used in conjunction with diet and exercise when other medications fail to adequately control blood glucose levels. Although Ozempic is not explicitly approved for chronic weight management, it can be prescribed off-label and safely used in individuals with obesity.

Anti-diabetic drug "Ozempic"

Wegovy, like Ozempic, is a brand name for semaglutide. It works by helping the pancreas release insulin, which transfers sugar from the bloodstream into body tissues. It also aids weight loss by slowing gastric emptying and suppressing appetite. Wegovy is essentially the same injectable medication as Ozempic but is typically prescribed at slightly higher doses.

The FDA has specifically approved Wegovy for patients with severe obesity, or those who are overweight and have one or more weight-related conditions (such as hypertension or high cholesterol), indicating broad market and application prospects.

It can be said that the addition of Weekend Health will push WW into a new, rapidly emerging field of health and weight loss.

In the 1960s, Ms. Jean Nidetch of New York, USA, decided to lose weight. After following a diet plan from a weight-loss organization for some time, she did see her weight drop, but soon hit a plateau where her weight stopped decreasing. Gradually, she discovered that the most effective approach to weight management was to maintain a normal diet while engaging in open conversations with supportive and understanding friends around her.

One day, Jean invited a few friends over for coffee and asked if they would be interested in following the science-based dietary recommendations suggested by her nutritionist. They agreed to join and met regularly to share their weight-loss progress.

Jean then began hosting interactive sessions in people’s homes, and more and more individuals joined her team. This approach proved highly effective, and all of these friends ultimately achieved successful weight loss. To help even more people around her lose weight, Jean founded WW International, Inc. in New York in 1963.

In 1974, WW was founded and began its global operations. To date, its business spans 26 countries and regions, including North America, Europe, and Australia.

With six decades of weight management experience, expertise, and technical know-how, the company has helped millions of people lose weight, becoming one of the most recognized and trusted brands among consumers.

WW’s Development History

WW’s Scientific Weight Loss Program achieves healthy and sustainable weight loss through smart eating, reasonable exercise, behavioral habit adjustments, and effective support.

The app enables simple daily meal tracking, barcode scanning, access to a vast recipe library, 24/7 system support, and additional weight-loss tools, helping users gain a comprehensive understanding of their personal weight-loss journey. It also provides round-the-clock remote access to coaches participating in the program, based on the user’s membership tier. Furthermore, the app offers daily check-ins for extra, personalized services.

APP Interface | Image Source: WW Official Website

According to the company, one of the most popular features is the Connect community on the WW app. Members can share their weight loss progress through photos and status updates, and interact with other members via Connect groups. In addition, WW holds weekly in-person meetings, allowing users to promptly discuss challenges and emotions encountered during their weight loss journey. Coaches can track, evaluate, and analyze weight loss outcomes from the previous week, providing guidance and adjustments as needed, while members offer mutual encouragement and support.

It is worth noting that WW also offers a universal ZeroPoint foods list, providing users with over 200 food options that help promote satiety, enabling weight loss without feelings of hunger. Additionally, WW provides access to more than 12,000 recipes, complete with details on portion sizes, preparation and cooking times, difficulty levels, and user reviews.

Food Nutritional Value Image Source: WW Official Website

Overall, WW does not help consumers lose weight by relying on traditional diet plans. Their philosophy is that “weight loss ≠ eating less,” and loving food should never be mutually exclusive with wanting to lose weight.

WW also creates personalized workout plans for its members. Users can join classes at various levels on demand, including cardio, strength training, and Pilates. As these are delivered via online video, users can train entirely at their own pace, with unrestricted 24/7 access to virtual coaching. They can chat and interact with expert coaches at any time to receive emotional support and encouragement. Additionally, users can sync their wearable fitness devices with the WW app for seamless tracking.

WW has now consolidated all its business operations, with promotional activities available year-round. Specific spending depends on whether users opt for Core Membership or Premium Membership. The main categories of business expenses are as follows:

1. Entry Fee. All new users are required to pay a $20 entry fee before selecting products that meet their needs.

2. Core Plan. Includes a customized nutrition plan to help users eat healthier, along with online tools, trackers, 12,000 recipes, and coaches accessible remotely around the clock. Starting at $23 per month.

3. Advanced Plan. Includes all the benefits of the Core Plan, plus in-person and virtual workshops. Starting at $45 per month.

4. WW Food (Optional). The planned costs include only the meal plans, not the food itself. WW encourages users to order the foods they prefer, which helps ensure the long-term sustainability of the program. Users can also order snacks and other food items from WW online.

According to WW International, the number of subscribed users in the fourth quarter of 2022 was approximately 3.5 million, a year-on-year decrease of 14.9%, primarily due to a decline in digital business across all geographic markets; revenue amounted to $223.9 million, down 15.5% from the same period last year; net profit was $127 million, compared with $168.9 million in the same period last year.

Total revenue for the full year 2022 was $1.04 billion, a decrease of 11.0% from the previous year. Net profit amounted to $622.4 million, compared with $726.4 million in the prior year.

WW Financial Performance 2017–2022

Data Source: WW Official Website

WW is projected to achieve revenue of $235 million in the first quarter of 2023. Following the acquisition of Weekend Health, WW’s operating income may usher in a sustained upward trend.

For decades, WW has not only maintained its traditional offline advantages but also actively embraced the new demands of the internet era, consistently utilizing its SmartPoints system to track food consumption and provide solutions for individuals seeking weight management.

However, the entry into the new weight-loss drug market has also sparked public skepticism. Some individuals have expressed concerns about the potential side effects, safety, and misuse among patients with eating disorders. Others question whether WW has abandoned its long-standing, effective approach to weight loss that combines dietary plans with exercise, while some doubt how the Weekend Health platform fits into WW’s business model.

WW stated that the introduction of weight-loss medications marks a step forward, emphasizing that it will not abandon diet and exercise, with medication serving merely as a supplement to weight loss. VCBeat will continue to monitor the specific impact of entering the prescription weight-loss drug market on WW.