LifeMD reports earnings miss, weak guidance amid “fierce competition” in GLP-1 market
The company has partnerships with Novo Nordisk and Eli Lilly, the drugmakers behind the blockbuster GLP-1 drugs.
LifeMD plunged in early trading Tuesday after it reported earnings results on Monday that missed Wall Street estimates, which it attributed in part to “fierce competition from low-price compounded GLP-1 providers.”
The telehealth company reported a loss per share of $0.10, significantly steeper than the $0.02 per-share loss analysts polled by FactSet were expecting. While the company’s sales for Q3 were in line with estimates, it said it expects revenue for the current quarter to hit at most $46 million, compared to the $50.5 million the Street was penciling in.
LifeMD is one of a handful of telehealth companies that have a partnership with both Novo Nordisk and Eli Lilly to sell discounted cash-pay versions of their blockbuster GLP-1 shots through their platform. But copycat versions, sold by companies like Hims & Hers, are still cheaper and tough to compete with on price. Even in the booming GLP-1 market, the company said, its weight management segment contracted slightly quarter over quarter.
“The last two quarters have been challenging in the weight management category due to intense competition from low-cost and in many cases low-quality compounded GLP-1 markers offering prices we cannot and will not match,” LifeMD CEO Justin Schreiber told analysts. “While many of these compounded products are less effective and in some cases unsafe, aggressive marketing and artificially low entry price points have drawn in a portion of consumers and created near-term pressure.”
LifeMD may have a tailwind going forward. The price of branded GLP-1s is starting to come down and oral versions are set to enter the market next year, which could bring a wave of subscribers to its platform.
The same day LifeMD reported earnings, Novo announced that it would slash prices for its cash-pay Wegovy and Ozempic shots, setting them at roughly the same price as compounded versions. Both Lilly and Novo promised the Trump administration they would lower prices on their blockbuster GLP-1 drugs next year.
Hims, for one, has seen its stock price slip on those announcements because it does not have partnerships with those drugmakers and has often been at odds with them. While its copycat versions have boosted sales in the past year, if the price of branded GLP-1s matches its copycat versions, consumers may turn to those.
As the pricing for branded versions falls, companies in good graces with the drugmakers may stand to benefit. “We have consistently believed the branded GLP-1 manufacturers would ultimately reduce pricing to broaden patient access, and that moment is now clearly underway,” LifeMD’s Schreiber said.
