Bloomberg News

EDiets, GlaxoSmithKline Pair on Weight-Loss Program

February 13, 2008

EDiets.com Inc. (DIET:US), the online operator of diet and nutrition programs, is joining with GlaxoSmithKline Plc (GSK) to provide customized low-fat meals for Glaxo's Alli weight- loss treatment.

``It creates the most comprehensive weight-loss program I think the market has seen before,'' EDiets Chief Executive Officer Stephen Rattner said in a telephone interview.

EDiets will offer co-branded meals tailored to Alli's fat- content specifications that customers can have delivered to their homes, Rattner said. He declined to disclose terms of the revenue-sharing agreement.

EDiets has attracted about 80,000 paid subscribers to its Web site, and started its meal-delivery service last year, Rattner said. Customers get a full day's worth of meals for $15.95.

Rattner said he expects the Glaxo partnership will draw in some of the more than 2 million customers he says have started to use the Alli weight-loss program in the eight months it has been on the market.

``Part of our strategy with Alli is to be a partner with consumers in their weight-loss attempt,'' Jeff Schuldt, director of promotions and alliances for Glaxo's consumer health-care unit, said in a telephone interview today. ``EDiets was a natural partner in this.''

Sales Boost

Glaxo reported Feb. 7 that sales of the over-the-counter treatment helped boost fourth-quarter revenue in its consumer unit by 13 percent, to 927 million pounds ($1.82 billion).

Rattner wouldn't disclose the projected effect of the partnership on EDiets' 2008 revenue, noting it should take effect ``relatively immediately, but ramping up in different ways as marketing rolls out.'' He had previously forecast 2008 sales of $50 million.

Slowing consumer spending hasn't affected EDiets' sales, even as customers cut back at retail stores and restaurants to offset higher gasoline prices and a slumping housing market, according to Rattner.

``The good news is people always have to eat,'' he said. ``We really did work very hard to make this affordable to as many people as we can.''

EDiets has been seeking a new chief financial officer since Robert Hamilton resigned last month and is in the ``final processes right now with finalizing something with someone hopefully in the near future,'' Rattner said.

EDiets, based in Fort Lauderdale, Florida, gained 3 cents to $4.89 as of 4:30 p.m. New York time in Nasdaq Stock Market trading. The stock has declined 17 percent this year.

Glaxo is the world's second-biggest drugmaker, behind Pfizer Inc.

To contact the reporter on this story: Meg Tirrell in New York at mtirrell@bloomberg.net.

To contact the editor responsible for this story: Colleen McElroy in New York at cmcelroy@bloomberg.net.


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