Memorandum
Stefan Oelrich, President of Bayer Pharmaceuticals, joins One Drop’s Board of Directors; “nearly 1.5 million” One Drop diabetes users globally
This morning, One Drop announced $40 million in Series B financing. In an unexpected move, Bayer led the round with a $20 million investment, alongside existing and new (unspecified) One Drop investors. Bayer also announced the news via press release.
In tandem, Bayer and One Drop have entered into a $10 million commercial licensing agreement to use the One Drop platform in new therapeutic areas – “oncology, cardiovascular disease, and women's health” were specified, reflecting quite an expansion for One Drop beyond diabetes. Bayer plans to leverage One Drop’s data science, software, AI prediction, and coaching platform for “empowering people with chronic diseases to aim at better outcomes.” The companies will collaborate on building new apps for other therapeutic areas, and disease-specific specialists/ coaches would be hired to handle the different needs in these areas. No timelines were shared.
As part of the deal, President of Bayer Pharmaceuticals Stefan Oelrich will join One Drop’s Board of Directors, which is a big deal. From 2011-2018, Mr. Oelrich worked at Sanofi, most recently as the head of the global diabetes franchise and then Executive VP of Sanofi’s Diabetes & CVD business. Previously, he had actually worked at Bayer. One Drop and Sanofi were working together back in 2017, when a type 2 diabetes study began in partnership with Common Sensing and Innovation Health.
This news initially took us by surprise, as Bayer divested its Contour blood glucose monitoring diabetes business to Panasonic Healthcare in 2015 for ~$1.2 billion. One Drop would have been a perfect asset for the BGM business back then, though it’s clear from today’s press release that “diabetes” is not the focus for Bayer here. One Drop CEO Jeff Dachis told us that Bayer was drawn to the “shared vision that accessible, affordable, effective, integrated virtual care driven by advanced data science could drive better health outcomes.” Indeed, that applies to most chronic diseases – not just diabetes.
One Drop now reports “nearly 1.5 million” registered users in 195 countries, up from “over 1.3 million” as of AADE last month. The app has impressive ratings on both Apple iOS (4.5/5 stars, n=9,200 ratings) and Android (4.0/5 stars, n=1,572 ratings, 500,000+ installs), and is up there with mySugr (1.8 million users) in terms of global popularity. We continue to wonder how many users are paying for One Drop’s subscription for BGM strips and/or coaching, which offer excellent value and convenience for the price.
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The One Drop team now numbers 30 (FTEs), though we’re not sure how many coaches it employs or how many patients each coach can handle. Presumably the scalability metrics look strong to push forward with new therapeutic areas.
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How is One Drop thinking about CGM integration over the next few years? We imagine CGM will continue to push into type 2 diabetes, though One Drop’s user experience (bubbles along a timeline) has historically been more suited to displaying BGM data. CEO Jeff Dachis shared the following: “We have thought a lot about the importance of CGM integration for all people with diabetes and we believe we have a unique perspective given our advanced position in glucose predictions and glucose forecasting. Obviously, the space is developing and we believe that One Drop is well positioned to embrace and extend the value of every CGM to enable the best health outcomes for people with diabetes and other chronic conditions. With 3 billion data points from over 70 biomarkers powering our platform, CGM is one important part of the equation.”
--by Adam Brown and Kelly Close