Health and wellness company makes $20 million
capital commitment to LifeMD, enters medically supported weight
loss market projected to reach up to $100 billion by 2030
Company discontinues quarterly cash dividend
and intends to invest in initiatives aimed at driving customer
acquisition and customer experience to reignite growth
Conference call to discuss Medifast and LifeMD
collaboration begins at 10 AM EST today
Medifast (NYSE: MED), the health and wellness company known for
its habit-based and coach-guided lifestyle solution
OPTAVIA®, today launched the first phase of its business
transformation, as part of its commitment to providing
comprehensive health and wellness solutions to customers across the
United States. The company will expand into the medically supported
weight loss market through a collaboration with LifeMD, Inc.
(Nasdaq: LFMD), a leading provider of virtual primary care. This
collaboration brings together OPTAVIA’s personalized
habit-based, coach-guided approach with medical expertise from
board-certified affiliated LifeMD clinicians and access to weight
loss medications, including GLP-1s. This establishes Medifast’s
entrance into the medically supported weight loss market, which is
expected to reach up to $100 billion by 2030.*
"This is a pivotal moment in our business as we begin an
aggressive transformation, committing more resources than ever
before to our OPTAVIA brand and driving growth in this
evolving health and wellness landscape,” said Dan Chard, Chairman
and CEO of Medifast. “Millions of people are seeking a solution
that I believe we are uniquely positioned to provide. Together,
Medifast and LifeMD expect to deliver a comprehensive approach to
health starting with weight management, built around a powerful
model of support that includes an independent OPTAVIA Coach
and a board-certified affiliated clinician. As a physician-founded
company with a long-standing scientific and clinical heritage, we
remain committed to helping even more people make living a healthy
lifestyle second nature.”
Strategic Collaboration with
LifeMD
Medifast has committed to make a $20 million investment in
LifeMD, including an expected $10 million in contributions to
support the collaboration, funding enhancements to LifeMD’s
platform, operations and supporting infrastructure along with the
purchase of $10 million of LifeMD’s common stock. In connection
with Medifast’s investment, LifeMD has agreed to customary demand
and piggyback registration rights which may expire no later than
five years from December 11, 2023, and granted Medifast board
observer rights, allowing for participation, without voting rights,
in LifeMD’s Board meetings. The collaboration between Medifast and
LifeMD is intended to create a comprehensive health solution to
combat the escalating obesity crisis, including addressing the
growing demand for medically supported weight loss by integrating
clinician care with one-on-one OPTAVIA Coach support,
community support, clinically proven plans and scientifically
developed products, and a proprietary Habits of Health®
Transformational System.
Medifast selected LifeMD as its partner following a successful
pilot program focused on providing personalized care to support
holistic health rather than weight loss alone. Independent research
commissioned by Medifast revealed that most individuals interested
in weight loss medications are looking for support beyond
prescriptions, including clarity on how to incorporate components
of healthy living, such as proper nutrition and exercise, into
their lifestyles while utilizing these medical solutions. LifeMD
brings a robust and scalable technology platform, which allows for
a highly tailored and streamlined coach and clinician-driven model,
and has invested in building a clinical team anchored by full-time
employed clinicians licensed to practice in all 50 states. This
patient-centric care model creates significant opportunity for
future collaborations that result in better support for individuals
looking to reach their health goals at any point within their
journeys.
“A shared philosophy of prioritizing holistic care and focus on
lifelong health makes this a natural collaboration between our two
companies,” said Justin Schreiber, Chairman and CEO of LifeMD.
“Medifast’s investment in LifeMD is affirmation of our
differentiated virtual care platform and clinical care model that
provides tremendous value for our partners, addressing the unique
health goals of our combined customer bases across multiple
healthcare sectors and conditions. LifeMD is pleased to partner
with Medifast to deliver a new model that has the ability to
significantly transform the weight management industry.”
This month, Medifast launched two new product bundles designed
specifically for those utilizing medically supported weight loss:
“OPTAVIA Nutrition Kit for Medically Supported Weight Loss”
and “OPTAVIA Muscle Health Kit for Medically Supported
Weight Loss”. Evidence suggests that the loss of lean body mass can
range from 20-50% of total weight loss for those on medically
supported weight loss medications.** With the inclusion of these
product bundles, OPTAVIA provides the tools to make healthy
eating - and a healthy lifestyle - second nature, both at the start
of a medical weight loss journey and while transitioning off
medication.
Investment in Growth and Capital
Allocation
The company has updated its capital allocation priorities
following a thorough review. Medifast’s Board of Directors has
elected to discontinue the company’s quarterly cash dividend,
effective immediately. The Board of Directors believes that
discontinuing the dividend at this time is in the best interest of
the company and its stockholders, as it allows the company to
redirect capital to 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
investments include a new marketing campaign designed to increase
brand awareness and drive customer adoption.
“The LifeMD collaboration is just one of several major growth
initiatives we plan to capitalize on in the years ahead, and we
believe investing in our business will deliver the most compelling
long-term return for our stockholders. Discontinuing the dividend
provides the flexibility needed to continue evolving our model as
we enter an exciting new chapter for our independent OPTAVIA
Coaches, customers, employees and stockholders,” added Chard.
Conference Call
Information
A conference call to discuss the collaboration is scheduled for
today, Wednesday, December 13, 2023, at 10:00 AM EST. The call will
be broadcast live over the Internet, hosted on the Investor
Relations section of Medifast’s website at www.MedifastInc.com or
directly at
https://viavid.webcasts.com/starthere.jsp?ei=1647146&tp_key=8c4bcb15e1
and will be archived online and available through March 13, 2024.
In addition, listeners may dial (877) 451-6152 to join via
telephone. A telephonic playback will be available from 2:00 PM
EST, December 13, 2023, through December 20, 2023. Participants can
dial (844) 512-2921 and enter access code 13743024 to hear the
playback. Slides describing the announcement are available at
https://ir.medifastinc.com/events.
About Medifast
Medifast (NYSE: MED) is the health and wellness company known
for its habit-based and coach-guided lifestyle solution
OPTAVIA®, which provides people with a simple, yet
comprehensive approach to help them achieve lasting optimal health
and wellbeing. OPTAVIA's lifestyle plans deliver clinically
proven health benefits as well as evidence-based tools, including
scientifically developed products and a framework for habit
creation reinforced by independent Coaches and Community support.
As a physician-founded company with a 40+ year history, Medifast is
a leader in the U.S. weight management industry. Through a
collaboration with the national virtual primary care provider
LifeMD, OPTAVIA customers have access to board-certified
affiliated clinicians and medications, such as GLP-1s, that support
treatment plans for obesity and other health conditions. The
company continues to innovate and build upon its scientific and
clinical heritage to fulfill its mission of offering the world
Lifelong Transformation, One Healthy Habit at a Time®. Medifast was
recognized in 2023 by Financial Times as one of The Americas'
Fastest Growing Companies and in 2022 as one of America's Best
Mid-Sized Companies by Forbes. For more information, visit
MedifastInc.com and OPTAVIA.com and follow @Medifast on
X.
For further information: Public Relations: Jessica Oring,
Jessica.Oring@medifastinc.com; Investor Relations: Steven Zenker,
Steven.Zenker@medifastinc.com
Forward Looking Statements
Please Note: This release contains "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995, Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
These forward-looking statements generally can be identified by use
of phrases or terminology such as "expect," “believe,”
“anticipate,” or other similar words or the negative of such
terminology. Similarly, descriptions of Medifast's objectives,
strategies, plans, goals, outlook or targets contained herein are
also considered forward-looking statements. These statements are
based on the current expectations of the management of Medifast and
are subject to certain events, risks, uncertainties and other
factors, including, among others: risks associated with Medifast's
direct-to-consumer business model; the success of collaborations
entered into to bring Medifast’s products to additional customer
demographics; planned investments; disruptions in Medifast's supply
chain; Medifast's inability to continue to develop new products;
effectiveness of Medifast's advertising and marketing programs,
including use of social media by independent OPTAVIA Coaches;
Medifast's inability to maintain and grow the network of
independent OPTAVIA Coaches; the departure of one or more key
personnel; Medifast's inability to protect against product
liability claims; Medifast's planned growth into domestic and
international markets; adverse publicity associated with Medifast's
products; fluctuations of Medifast's common stock market price; the
prolonged effects of COVID-19 on consumer spending and disruptions
to Medifast's distribution network, supply chains and operations;
increases in competition or litigation; and the consequences of
other geopolitical events, including natural disasters, global
health crises, acts of war, climate change, regulatory changes,
increases in costs of raw materials, fuel, or other energy,
transportation, or utility costs and in the costs of labor and
employment, labor shortages, supply chain issues and the resulting
impact on market conditions and consumer sentiment and spending.
Although Medifast believes that the expectations, statements and
assumptions reflected in these forward-looking statements are
reasonable, it cautions readers to always consider all of the risk
factors and any other cautionary statements carefully in evaluating
each forward-looking statement in this release, as well as those
set forth in its Annual Report on Form 10-K for the fiscal year
ended December 31, 2022, and other filings filed with the United
States Securities and Exchange Commission, including its quarterly
reports on Form 10-Q and current reports on Form 8-K. All of the
forward-looking statements contained herein speak only as of the
date of this release.
*Terence Flynn, Framing the Mounjaro bull case in diabesity,
Morgan Stanley Research, 9/14/23
**Sargeant JA, Henson J, King JA, Yates T, Khunti K, Davies MJ.
A Review of the Effects of Glucagon-Like Peptide-1 Receptor
Agonists and Sodium-Glucose Cotransporter 2 Inhibitors on Lean Body
Mass in Humans. Endocrinol Metab. 2019;34(3):247-262. doi:
10.3803/EnM.2019.34.3.247.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231213139640/en/
Public Relations: Jessica Oring, Jessica.Oring@medifastinc.com
Investor Relations: Steven Zenker,
Steven.Zenker@medifastinc.com
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