$WW's Weighty Gamble on "Ozempic" Knock-Off Pays Off Bigly (Share's Pop 77%)

In 2024, you’re either injecting yourself with some variation of semaglutide or you're watching your stock boom. And WeightWatchers (WW) is doing everything they can to be on both sides of that trade.  

(Source: Giphy) 

In short, WW stock absolutely swooned 46.9% yesterday - after the company announced its latest magic bullet for weight loss: a discounted, compounded version of semaglutide. For those not fluent in Big Pharma jargon, think of it as knockoff Ozempic, Wegovy’s scrappy little cousin.

(Source: Fast Company) 

And if you're wondering, yes, this is the same move Hims & Hers pulled out of its hat last year. Spoiler alert: it worked… up until Eli Lilly’s weight-loss drug magically reappeared on the FDA’s “not in shortage anymore” list. Hims & Hers stock immediately got body-bagged by shorts. 

But, but, but…  WeightWatchers is betting big on its new GLP-1 offering, trying to convince everyone that it’s not just some diet fad app anymore. Nope. Now it’s a "clinical weight management solution." Suuuure, we’ll go with that. 

(Source:Giphy) 

This compounded semaglutide will be filled out through WeightWatchers’ Clinical platform, which is basically an attempt to sound super legit while offering what amounts to a generic version of a blockbuster drug. The company says the compounded treatments will contain the same active ingredients as Novo Nordisk’s Wegovy (you know, the drug that’s been stealing WW’s lunch money for the past year).

And because branding is everything, WW is quick to point out that they’re offering a “science-backed, behavioral and lifestyle support” program alongside the drugs. Translation: "We’re still pretending our core business is relevant."

(Source: MarketWatch) 

The price point, you ask? A cool $129 — which is basically a steal if you consider that Wegovy and Ozempic can run you upwards of $1,000 per month. So yeah, WeightWatchers is hoping that by undercutting Big Pharma with its “Great Value” GLP-1, they can claw back some of the customers who ditched them for the real deal. 

(Source: Bloomberg) 

Now you may be wondering, if this is just a straight-up no-fluff knockoff of the real thing, why did the stock absolutely explode? Well, because just like AI in 2024, investors apparently love anything with the word “semaglutide” in it. Shares popped bigly yesterday, adding a nice 21.46% gain so far today. Which is absolutely ludicrous considering the stock was trading for legit pennies two short weeks ago - and is now up over 77% over the past five trading days. WILD.

Simply put, WW says this new semaglutide offering is their way of addressing the ongoing shortage of weight-loss drugs. And to be fair, they’re not wrong. The shortage has been brutal for everyone trying to ride the GLP-1 hype train. CEO Tara Comonte (who, let’s not forget, is only holding down the fort temporarily after Sima Sistani stepped down) says the company is making weight loss more “accessible and affordable.”

But of course, like every good story, not everyone is picking up what WW’s is putting down. For instance, Barclays slapped an “Underweight” rating on WW and reiterated its price target of… wait for it… $0.75. Meaning, they are basically saying, “this thing is still going to zero, but enjoy the ride while it lasts ole chaps”.

(Source: Investing.com) 

As it turns out, Barclays’ concern is that the whole “compounding” game isn’t exactly a long-term solution. Once the FDA shortage list gets updated (which already happened with Eli Lilly’s drug), the window for large-scale compounding slams shut, and WW will be left scrambling to maintain relevance.

So while WW’s compounded semaglutide might be a short-term fix, it’s not a sustainable strategy unless you think “pretending to be Big Pharma” is a long-term business model.

(Source: Giphy) 

In the end though, while WeightWatchers stock is skyrocketing in hopes that their compounded semaglutide is their ticket out of irrelevance, the long-term risks are real af. And let’s be honest: when your entire strategy boils down to “we’ve got our hands on the knockoff version of Ozempic,” you’re probably not in the best place to begin with. But hey, kudos for trying, I guess.

In the meantime, keep an eye on this stock throughout this week, but don’t be surprised if this stock comes crashing back down to reality soon. Only time will tell of course, but as always, stay safe and stay frosty, friends! Until next time…

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Stocks.News does not hold positions in companies mentioned in the article.