WeightWatchers soared before the opening bell Tuesday after the company said it was getting into the prescription drug weight loss business with the acquisition of Sequence.
Sequence, a telehealth operator, says that its specialists can prescribe medications under brand names including Ozempic, Wegovy and Trulicity.
Shares of WW International Inc. jumped nearly 12%.
WeightWatchers offers subscribers meal plans with the goal of losing excess weight. With the acquisition of Sequence, the company is tapping into a red-hot market for prescription drugs that addresses obesity, and broadening what it offers to customers.
"It is our responsibility, as the trusted leader in weight management, to support those interested in exploring if medications are right for them," said CEO Sima Sistani said in a prepared statement late Monday.
Ozempic, also known as semaglutide, works by stimulating the body's own insulin production and reducing appetite. While it is prescribed for diabetes, Ozempic can also help people lose weight.
If it's not treated, obesity can lead to lifelong health problems, including high blood pressure, diabetes and depression.
WW International will pay $106 million for Sequence, which served about 24,000 members across the U.S. as of February.
The acquisition is expected to lose in the fiscal second quarter.