Digital Health Firms Capitalize on $100B GLP-1 Boom, Hims & Hers Shares Up 28%

Digital health companies tap into $100 billion GLP-1 market, with 15 million U.S. adults projected on anti-obesity drugs by 2030.

By Alex P. Chase

5/25, 09:22 EDT

Key Takeaway

  • The GLP-1 market is booming, with Goldman Sachs predicting 15 million U.S. adults on anti-obesity drugs by 2030, potentially reaching $100 billion in annual revenue.
  • Companies like Ro, Hims & Hers, and WeightWatchers are capitalizing on this trend with specialized programs and seeing significant growth; Hims & Hers shares rose 28% after announcing compounded GLP-1 injections.
  • Supply shortages and counterfeit issues pose challenges, but companies are investing heavily in marketing and technical solutions to navigate these hurdles.

Growing Demand for GLP-1s

The market for GLP-1 medications, a class of drugs used for weight loss and diabetes management, is experiencing significant growth. Online health startup Ro has capitalized on this trend with its Ro Body Program, which offers GLP-1 prescriptions, monthly doctor consultations, and additional support services. Gray Beard, a kindergarten teacher from Charlotte, North Carolina, has seen success with the program, losing 40 pounds since starting it last year. Beard pays $30 per month for the GLP-1 treatment, after insurance coverage, and a $145 monthly fee for the program. "I’m fine if I have to stay on it forever," Beard told CNBC.

Goldman Sachs analysts predict that 15 million U.S. adults will be on anti-obesity drugs by 2030, with the industry potentially reaching $100 billion in annual revenue. The GLP-1 class includes popular drugs like Novo Nordisk’s Wegovy and Ozempic, and Eli Lilly’s Zepbound and Mounjaro. These medications mimic a hormone produced in the gut to suppress appetite and regulate blood sugar.

Other companies, such as Calibrate, Sesame, Omada Health, Noom, Hims & Hers, Teladoc Health, and WeightWatchers, have also entered the GLP-1 market. Hims & Hers saw a 28% increase in shares on May 20 after announcing the availability of compounded GLP-1 injections. CEO Andrew Dudum expressed confidence in maintaining a consistent supply of the injections.

Supply and Counterfeit Challenges

The rising demand for GLP-1 medications has led to supply shortages and an increase in counterfeit products. The World Health Organization highlighted the issue in January, noting that the combination of shortages and falsified versions is particularly problematic for patients with Type 2 diabetes. Ro founder Zachariah Reitano acknowledged these challenges but remains optimistic about the potential of GLP-1s. "GLP-1s are like a 'jetpack for positive behavior change,'" Reitano said, emphasizing the benefits of the medications in promoting healthier lifestyles.

Ro has raised around $1 billion in funding and was valued at approximately $7 billion as of early 2022. The company has invested heavily in marketing its GLP-1 program through digital ads, TV commercials, and influencer campaigns. Despite the supply issues, Ro has built technical tools and operations to help patients navigate these challenges, including transferring prescriptions to different pharmacies based on supply and proximity.

WeightWatchers and Calibrate's Approach

WeightWatchers, a long-standing name in the weight loss industry, entered the GLP-1 market in December with a behavioral-support program available through its general membership subscription. The program includes access to registered dieticians, fitness professionals, and care team coordinators for an additional fee. Gary Foster, WeightWatchers' chief scientific officer, noted that the program had to be adapted for patients on GLP-1s, as their needs differ from those not on the medication.

Calibrate, founded in 2019, combines GLP-1s with one-on-one coaching. The program costs $199 a month, excluding medication, and requires an initial three-month commitment. Jennifer VanGilder, an economics professor, lost around 100 pounds through Calibrate's program. "That’s why I’ve been able to stay on it for as long as I have," VanGilder said. Calibrate's 2024 report showed average weight loss of 16.2% at 12 months, 17.3% at 18 months, and 17.9% at 24 months.

Street Views

  • Goldman Sachs Analysts (Bullish on the GLP-1 market):

    "The opportunity could be massive. Goldman Sachs analysts expect 15 million U.S. adults to be on anti-obesity drugs by 2030, and predict the industry could reach $100 billion in annual revenue by that time."

Management Quotes

  • Andrew Dudum, CEO of Hims & Hers:

    "We’re going to have people, for one reason or another, who either don’t want an injection at this point, or are just looking for a different alternative... These are tools we’ve been using in our field for a long, long time."
    "Customers can now access compounded GLP-1 medications via a prescription from a licensed health-care provider on the platform. Hims said it plans to make branded GLP-1 medications available to its customers once supply is consistently available."

  • Zachariah Reitano, Founder of Ro:

    "GLP-1s are like a ‘jetpack for positive behavior change.’ Patients tend to exercise more, eat healthier and see around a 30% reduction in calorie intake."
    "Once you get a little bit of momentum, once you lose a little bit of weight, you’re sleeping better, you have more energy... That’s that positive flywheel."