mySugr CEO talks about Roche acquisition and what’s to come with digital health-pharma deals (Q&A)

mySugr cofounder and CEO Frank Westermann responds to questions about the recent acquisition of his smartphone-enabled diabetes management business and what will come next.

mySugr cofounders from left: Frank Westermann, Gerald Stangl, Fredrik Debong, and Michael Forisch.

Last month, Swiss pharma company Roche acquired mySugr as part of a broader strategy to serve customers with diabetes. mySugr cofounder and CEO Frank Westermann responded to emailed questions on how the deal unfolded, its significance and what comes next.

This exchange has been lightly edited

How did this acquisition happen?

The negotiations that led to this deal were intensive and long. It was probably the most interesting but also the most exhausting time for us founders and the management team in the history of mySugr. Our former shareholders Johann Hansmann and Adam Lin, General Partner at iSeed Ventures supported us in every way they could. The team from J.P. Morgan managed the process. No surprise that a lot of lawyers were involved too.

When we started mySugr five years ago, we wanted to solve problems of people with diabetes including our own (my cofounder Fredrik Debong and I have type 1 diabetes). The reasons for the success of mySugr within the diabetes community and this exit are a combination of different things: the right product (from patients for patients), the right timing (we started when the iPhone was first introduced), a strong founder team with a shared vision and shareholders who always had our back.

What did you and your team learn from this experience?

That is a tough question because there’s just so much we learned over the last 5-6 years, but let me point out what it took to get where we are:

  • Plain hard work and long hours;
  • Co-founders you can trust, who believe in a mission and are not money driven;
  • Recruit better people than you can actually afford (but make sure the personality fits);
  • Sell to investors and customers even though the product isn’t perfect yet;
  • Grab lucky opportunities when you see them (and realize they are lucky breaks); and
  • Make the big and important decisions (and forget about the smaller ones).

What were the expectations of this deal and how have they panned out?

It has only been two weeks since the acquisition but we feel that Roche shares our vision for the digitalization of diabetes care and putting the needs of people with diabetes in the center of our work.

It is vital for us to keep the spirit and the culture of mySugr alive for the future and that is only possible if we maintain a certain level of autonomy. That’s why we’ll remain a separate legal entity and keep our platform open to other companies. Nevertheless, we will work on finding synergies between Roche and mySugr to become more efficient. We have a project team with people from Roche and mySugr taking care of that. First meetings have already taken place at the mySugr HQ in Vienna, but also in Basel (Roche HQ Europe), Barcelona (Roche Digital Hub) and Indianapolis (Roche HQ U.S.). Everybody involved from both companies is very excited about working together.

How do digital health companies like mySugr work with pharma?

Partnering with the leading diabetes companies in the world has been a core strategy for mySugr. We have been working on providing seamless product integrations with leading devices to our users in order to offer the best possible therapy setup. Small companies like mySugr are usually much faster and more agile, and such collaborations can really be beneficial for big companies who want to enter into the digital sphere. It allows them to learn even before they launch their own products.

We have collaborated and integrated with Roche before the acquisition (e.g. the Accu-Chek blood glucose meters) and will continue to do so with Roche and other diabetes companies.

For the future, I see a general shift in the digital diabetes industry. Some companies who compete against each other in one area may work together in a different area. The whole diabetes industry is moving towards more openness and cooperation. For example, Medtronic has long been known for working behind closed doors, but they too have opened up to data integration with companies like Glooko or mySugr and even Roche.

What do the next stage of pharma and digital health collaborations look like?

Recent medical developments have gone towards personalized healthcare, meaning that patients get individualized treatments for their specific needs and also manage their disease.

Buzzwords that come to my mind in this context include big data, artificial intelligence, closed loop systems (not only for diabetes), and precision medicine.

In Germany, we recently launched the “mySugr package” with insurer VKB (Versicherungskammer Bayern — Bavarian Insurance Chamber) for people taking insulin. It includes automated shipping of unlimited test strips, Roche’s new Accu-Chek Guide meter (which connects to the mySugr app), mySugr Coach, and the mySugr Pro app. This new “package” is a great move to add more value and support for those on insulin, going far beyond just giving users a meter and strips. Such business models will change the healthcare market forever. We are working on making the mySugr package available to more people in more countries, including the U.S.

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