LifeMD Inc.’s stock soared 12% early Wednesday, after the virtual primary care provider said it’s teaming up with Medifast Inc. MED, +1.03% to create a clinically supported weight management program that will include the new class of weight-loss drugs called GLP-1 receptor agonists.
Baltimore-based Medifast is a wellness company known for its habit-based and coach-guided lifestyle service Optavia.
The drugs developed by Eli Lilly & Co. LLY, +0.12% and Denmark’s Novo Nordisk NVO, -0.46% NOVO.B, +0.92% are named after a gut hormone that they mimic to control appetite and blood sugar have become highly popular and have even suffered shortages in the past year.
For more, read: Eli Lilly’s Mounjaro three times more effective than Ozempic for weight loss, real-world study finds
LifeMD LFMD, +1.76% said the move will give it access to a market that’s expected to reach $ 100 billion by 2030.
The partners will offer a program that includes one-on-one Optavia Coach support, proven plans and scientifically developed products, a proprietary Habits of Health (R) Transformational System, as well as community support.
Medifast has agreed to invest $ 20 million in LifeMD, including buying $ 10 million of its stock. The company said its board has opted to discontinue its quarterly cash dividend with immediate effect and to instead invest in technology and growth initiatives.
“This is intended to improve customer acquisition and customer experience, which the company expects will generate higher long-term stockholder returns, as well as allow for stock repurchases when management and the Board deem it appropriate,” the company said.
The companies will hold a conference call at 10 a.m. Eastern to discuss the agreement.
Mdifast’s stock rose 2% premarket.
LifeMD’s stock has gained 318% in the year to date, while the S&P 500 SPX, +0.46% has gained 21%.