2023-12-13 15:50:11 ET
Summary
- Medifast partners with LifeMD to offer virtual weight management program with access to GLP-1 drugs.
- Medifast invests $20 million in LifeMD, with $10 million represented by common stock purchase.
- Survey shows over 40% of people with BMI greater than 27 are interested in prescription weight loss medication.
LifeMD ( LFMD ) announced today a strategic alliance with Medifast ( MED ) whereby Medifast will utilize LifeMD's virtual care technology platform to provide its OPTAVIA clients access to a clinically-sponsored weight management program, including the use of GLP-1 drugs. As part of the agreement, Medifast is investing $20 million into LifeMD, with $10 million being represented by common stock purchase . It is worth noting that a recent Medifast-commissioned survey revealed that over 40% of people with a BMI greater than 27 are interested in prescription weight loss medication.
I have previously discussed that I believe the GLP-1 class category will become the largest selling drug category , with US revenues of $150 billion in 2030. This forecast significantly exceeds the consensus estimate, even though the latter has risen dramatically. There are 110 million obese adult Americans, and obesity contributes to seven of the top fifteen chronic conditions. As a result, patients present to several different medical specialists, including cardiologists, hepatologists, nephrologists, orthopods and diabetologists. It is therefore likely that the patient will be prescribed a GLP-1 medication, especially with the recent approval of Eli Lilly's ( LLY ) very effective Zepbound.
LifeMD management will provide 2024 revenue guidance in January. However, I note that they recently stated at the Sidoti Micro-Cap Virtual Conference that revenue growth in 2024 and 2025 should exceed 30% , and that the adjusted EBITDA margin should increase from 7% to 25% over the next four years. For 2023, guidance is for revenues of $148-$149 million. I note that the consensus revenue forecast for 2024 is $182 million (+23%), and for 2025, $218 million (+20%). My revenue estimate for 2024 is $205 million (+38%).
In prior articles, I have written that, not only should the GLP-1 drug companies do well, but so should several derivative beneficiaries, including LifeMD . As with Eli Lilly, I believe that revenue and adjusted EBITDA margins for LifeMD will be revised upward continually over the next two years. The company is well-positioned to experience rapid growth due to the upcoming tremendous use of GLP-1 prescriptions.
For further details see:
LifeMD: Medifast Partnership Further Validates Weight Management Program