Shares of WW International, or WeightWatchers, took a hit as Eli Lilly, a pharmaceutical giant, unveiled its latest online service. This offering includes telehealth prescriptions and direct home delivery of its groundbreaking anti-obesity drug, Zepbound.
In afternoon trading, the stock dipped 12% to $6.77. However, it's important to note that shares have seen a notable 55% increase over the past year.
WW has been actively venturing into telehealth to capitalize on the growing market for weight-loss drugs. In a strategic move last year, the company acquired telehealth firm Sequence for a staggering $106 million.
According to analysts at DA Davidson, Lilly's telehealth platform, known as LillyDirect, will likely enjoy an advantage over its competitors due to the current scarcity of weight-loss drugs. However, as production ramps up, the analysts note that "the winners and losers in this space will be determined by who can provide the best service."
The introduction of Lilly's new service has also impacted other telehealth companies. Hims & Hers Health saw its shares trade down approximately 7%, while LifeMD experienced a significant drop of around 33%.