Aside from Humana and Kaiser Permanente Ventures, Omada Health has scored yet another insurer investor: Cigna.
Omada, which has a built a digital platform to prevent prediabetics from becoming full-blown Type 2 diabetes patients, announced Wednesday that Cigna led its $50 million round that also attracted two new investors: Civilization Ventures and Sanofi Genzyme BioVentures.
Cigna is doing more than just investing in Omada. It is also expanding its commercial partnership with the San Francisco-based company such that the behavioral health technology will be made available to Cigna customers with prediabetes, as well as those at higher risk of chronic conditions such as heart disease and hypertension.
“We love when our commercial partners invest, and Cigna’s lead on this fundraising round is further validation that Omada’s behavior change approach to chronic disease prevention is driving real results in the real world,” said Sean Duffy, CEO of Omada Health in a press release.
Getting payer buy-in is key to the adoption of digital health in healthcare overall, and in the last five years, payers have made quite a few digital health bets, both as investments and acquisitions.
Those deals number 63 between the first quarter of 2012 and the first quarter of this year, according to a report by CB Insights.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Interestingly, that report published in May notes that Omada “was the only company during this time period to have multiple investors among top health insurer” — Humana and Kaiser Permanente Ventures.
These two did not sit on the sidelines in the current Omada investment round. Both were return investors as were the following: U.S. Venture Partners, Andreessen Horowitz, Norwest Venture Partners, Providence Ventures, and dRx Capital and GE Ventures.
Omada Health has won traction in the marketplace, including with the likes of Intermountain Healthcare because it has shown clinical validation of its digital behavioral health technology. It also is able to integrate wellness coaches or diabetes prevention coaches with social networking into its digital health app as well as incorporate data from physical activity trackers and the Bluetooth weighing scale.
For Cigna, investment into Omada Health appears to be another foray into digital health. The company had invested in Audax Health Solutions, but Cigna’s competitor UnitedHealth Group’s health IT unit, Optum, took a majority interest in Audax in February 2014 leading to a legal dustup.
There was no immediate response to an emailed request for comment from a Cigna spokesman late Tuesday on the Omada Health transaction. But a GE Ventures executive explained the significance.
“Cigna as a partner is very significant because it validates the cost effectiveness.,” said Leslie Bottorff, managing director, healthcare at GE Ventures, which first invested in Omada in September 2015, in an email. “And it opens up access and reduces the friction of reimbursement challenges to a large patient population that could benefit from the program.”
While Cigna jumped on the Omada bandwagon with payers like Humana and Kaiser Permanente Ventures, the busiest and most active payer in the digital health market in the last five years has been the venture arm of Blue Cross Blue Shield. It did a total of 19 digital health deals.
Phtoto: Abscent84, Getty Images
