(Reuters) – Teladoc Health Inc is expanding its telehealth services to include prescribing obesity drugs such as Novo Nordisk’s Wegovy, in the latest sign of growing interest in a multi-billion dollar market.
Shares of the company jumped 11% after Teladoc announced its foray into the weight-loss drugs market, which is globally expected to grow to $50 billion in sales by 2030.
Last month, WW International Inc, known as WeightWatchers, announced its acquisition of subscription telehealth platform Sequence, moving the weight-loss program operator into the obesity drug prescription business.
Teladoc’s move reflects the surge in popularity in weight-loss drugs following the recent approval of Novo Nordisk’s Wegovy as well as the widely expected approval of Eli Lilly and Co’s tirzepatide for obesity later this year.
Wegovy is far more efficient at causing weight loss in patients than similar drugs on the market.
About 42% of adults in the United States were estimated to live with obesity and 1 in 3 American adults have pre-diabetes, Teladoc said.
Its expansion could unlock a $200 million or more revenue opportunity for the company, Piper Sandler analyst Jessica Tassan told Reuters.
Teladoc was so far providing doctor-based services to diabetes and hypertension patients through Livongo, the chronic care platform it acquired in 2020, but will now cater to a large market with new diabetes and weight loss medications as well.
The new program, while similar to the legacy Livongo weight-management and diabetes program, has the added benefit of patients being able to interact with a doctor, who will be able to prescribe weight loss drugs, Citi analyst Daniel Grosslight said.
Drugmakers such as Eli Lilly and Co, Amgen Inc and Novo Nordisk are racing to grab a share of the obesity drugs market.
(Reporting by Mariam Sunny and Leroy Leo in Bengaluru; Editing by Savio D’Souza and Shinjini Ganguli)
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