Another digital health company is looking to make the link between physical and mental health conditions. DarioHealth, a company that provides a smartphone-based system to help people monitor their blood sugar levels, recently struck an agreement to buy mental health startup WayForward for $25 million.
Combined with DarioHealth’s other programs for diabetes, hypertension and back pain, it would give health plans one solution to address multiple conditions, wrote DarioHealth President Rick Anderson, who also manages the company’s North America business.
The deal would give DarioHealth a way to triage users’ mental health needs and refer them to providers covered by their health plan or EAP. After they fill out a questionnaire, wayForward automatically routes them to mental health providers, health coaches or self-guided mindfulness tools.
It would also combine the two companies’ respective customer bases. Currently, wayForward works with 20 self-insured employers and roughly 20,000 members.
DarioHealth will pay $25 million for the startup at closing, including $6 million in cash and $19 million in stock. It will also pay up to $5 million more if behavioral health revenues exceed a certain threshold next year.
WayForward co-founders Ritvik Singh and Navya Singh will join the combined company.
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.
The deal would mirror benefits offered by larger competitors Omada and Livongo, which also have integrated mental health with their digital programs for diabetes and hypertension. Though DarioHealth, by revenue, is still much smaller.
The company brought in $3.6 million in revenue in the first quarter of 2021, and posted a $15 million net loss. By comparison, Livongo brought in just short of $69 million in revenue during the first quarter of last year, before it was acquired by Teladoc.
It’s also a slightly different approach for DarioHealth, which has previously focused on selling directly to consumers. It recently announced plans to buy Upright, another company with direct-to-consumer roots offering smartphone-connected sensors for back posture, for $31 million.
Photo credit: John Slater, Getty Images,
