With almost two thirds of adults in England either overweight or obese, the UK obesity epidemic is estimated to cost the NHS £6.5bn annually.
As a result, a range of innovative weight management solutions are being created and this is driving investment activity. We expect to see further M&A, private equity and venture capital activity across the sector going forward.
View our report covering the key drivers of the market and recent investment activity below.
Obesity & weight management headline issues
Almost two thirds of adults in England are estimated to be overweight or obese, and this prevalence continues to grow
Obesity is a risk factor for a range of chronic diseases, including cardiovascular disease, type 2 diabetes, at least 12 kinds of cancer, liver and respiratory disease, in addition to mental health. Sadly, the Covid pandemic also highlighted that those with obesity are much more likely to become seriously ill as a result of the virus
In 2019/20 there were over 1 million hospital admissions with obesity as a primary or secondary diagnosis, an increase of 17% on the previous year
This obesity epidemic costs the NHS an estimated £6.5bn on an annual basis, with the full social cost to the UK estimated at an eye watering £58bn annually
In an attempt to address the growing issues, the NHS long term plan outlined aims to improve the targeting of weight management services, with the government committing £100 million of funding towards this in 2021/22
However, despite continued rising obesity rates, the UK government has pulled this funding grant a year after it was announced, diverting it to pay for the ‘Living with Covid’ plan
Funding cuts aside, the epidemic is driving the requirement for innovative weight management treatments and this is leading to a range of investments in the sector
How is the NHS addressing the obesity epidemic?
The NHS provides four tiers of weight management services, designed to create sustainable results for those suffering from obesity and related issues
The focus is initially on behavioural and lifestyle changes through tiers 1 and 2, rather than medicinal and surgical solutions which may not be successful in isolation
Following the fast-tracked acceptance of digital solutions during the Covid pandemic, the NHS Digital Weight Management Programme (DWMP) was launched in 2021 with £12 million of funding
The programme offers online access to tier 2 weight management services for individuals living with obesity who also have a diagnosis of diabetes or hypertension
The DWMP has been outsourced to a small pool of private providers who have shown significant growth as a result
Whilst medicinal and surgical options do become available in tiers 3 and 4, the number of prescriptions and surgical procedures have remained relatively flat in recent years
This may be set to change due to NICE’s high profile approval of Semaglutide, a new weight loss drug showing dramatic results which is set to become available in the UK in early 2023
Increasing prevalence of direct-to-consumer offerings
Given that NHS weight loss services are primarily aimed that those with a BMI in excess of 30 (i.e. clinically obese), there remains a broad pool of individuals who are unable to access support and treatment
Furthermore, medicinal and surgical treatments under the NHS are often delayed until lifestyle and behavioural changes have been fully adopted, and reserved for those with higher BMIs
As a result, there is growing demand for direct-to-consumer offerings as a way of fast-tracking treatment
On the medicinal front, digital clinics such as Lloyds, Pharmacy2U and PrivateDoc provide consumers with direct access to clinicians and the prescription of weight loss drugs with supporting treatment plans. This market will no doubt expand further as Semaglutide becomes available in the UK in early 2023
Technological advances are also creating accessible and efficient non-surgical alternatives for consumers, such as swallowable gastric balloons
The broader movement towards digital wellbeing has also driven consumer demand for digital lifestyle focused weight loss solutions. American corporate Noom is the most high profile of these providers, offering a combination of psychology, technology and human coaching to improve outcomes
Weight loss investment activity
The majority of investment activity in the UK weight management sector has been linked to digital services, and supported by the launch of the DWMP by the NHS
Of the six approved providers on the programme, four have received high profile venture capital investment in recent years as outlined to the right (Oviva, Liva, Xyla and Second Nature)
In the broader provision of community-based services, activity has been more limited, with Foresight’s investment into ABL Health the primary transaction of note
We expect to see further investment activity across community-based weight management services in the mid-term due to the strong underlying demand drivers
Similarly, investment into the direct-to-consumer market has primarily been focused in the US with companies such as Noom (behavioural) and Found (medicinal) raising significant sums to fast-track their growth plans
Again, we expect to see increased M&A and investment activity across the UK direct-to-consumer weight management market going forward
This will be supported by the release of new drugs and the increased accessibility of non-invasive treatments, in addition to the growing trend of consumers looking to proactively manage their wellbeing outside of the NHS system
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