Memorandum

Glooko and Diasend merge into joint company, plan to create unified product in next year; complementary strengths, interview with teams – September 13, 2016

Executive Highlights

  • Today, Glooko and Diasend announced they are merging into a joint company under the Glooko name. Over the next year, they will merge their respective products into a single offering, ultimately creating the “World’s Premier Diabetes Management Platform.” Combined, the two companies cover 95% of the device market and are currently deployed at 4,000+ health systems in 23 countries and 15 languages.
  • Glooko CEO Rick Altinger will serve as CEO of the unified company, while Diasend CEO Anders Sonesson will manage Global Operations. The companies raised an additional $8 million (led by VC firm Canaan Partners) to support integration and international scale.
  • This is excellent news for patients, HCPs, industry, and payers. Diabetes data has needed a single go-to global repository that works with every device; enables easy zero-hassle upload (in clinic, at home, in real-time); and gives patients and providers lightning quick, actionable analysis. Both companies bring complementary strengths to the table, and we believe they will move faster by combining efforts.
  • Read our very positive interview with the Glooko/Diasend team below, including asks for companies in diabetes, barriers to the long-term vision, and what will change by 2021.

Today, Glooko and Diasend announced they are merging into a joint company under the Glooko name. The combined organization will create the “World’s Premier Diabetes Management Platform” – enabling data upload and visualization from 160+ different BGM, CGM, and pump devices (95% of the market) in a single web and mobile platform. Together, Glooko/Diasend are currently deployed at 4,000+ diabetes health systems in 23 countries and 15 languages.

Over the next year, the companies will merge their respective products into a single data management offering on web and mobile. They are starting with customer needs and market requirements, with plans to leverage the best of both products. Glooko CEO Rick Altinger will serve as CEO of the unified company, while Diasend CEO Anders Sonesson will manage Global Operations. Glooko’s HQ will remain in Mountain View, CA and the Global Office will be in Gothenburg, Sweden.

Remarkably, this deal happened in less than six months (!). The two companies have always been friendly, but after they began talking in Spring 2016, they realized the missions and long-term visions were very similar. Their respective investors approved the merger, and the companies have raised an additional $8 million (led by VC firm Canaan Partners) to support integration and international scale. The goal is to merge to a single business model that provides some free services for patients, while clinics will pay a monthly subscription for the data upload service. For base remote patient monitoring, Glooko charges an average of $15 per patient per month - additional modules like Mobile Insulin Dosing and Pump Algorithms are incremental from there.

We see this news as outstanding for people with diabetes, healthcare providers, payers, and industry – see the breakdown below. Diabetes data has badly needed a single go-to global repository that works with every device; enables easy zero-hassle upload (in clinic, at home, in real-time); and gives patients and providers lightning quick, actionable analysis. Given how healthcare is moving, this must all fit into a population health management system that flags at-risk patients and enables HCPs to quickly reach out between appointments. We believe the merged company can more easily achieve this vision than as separate organizations. Said Glooko VP Michelle de Haaf in our interview, “Now that we’ve joined forces, we can bring more product and more powerful features to market more quickly on a bigger scale.” We like that!

Glooko and Diasend bring very complementary strengths to table. Glooko has a growing US presence; excellent user experience, mobile app, and data analytics; a focus on population health management; and a pipeline of exciting insulin titration algorithms. Meanwhile, Diasend brings world-class expertise in data capture and device compatibility; deep international experience in 23 countries; and significant scale (500,000 active patients) in widely varying reimbursement and clinical environments. Both companies receive great reviews from clinicians worldwide, who have been frustrated with the heterogeneous device and data landscape for far too long. We hope this merger helps change that at an even faster clip.

Below, we enclose a summary of both companies’ key strengths; the deal’s potential impact and questions from different stakeholder perspectives; and an interview with the Glooko and Diasend teams.

  • We hope that Glooko+Diasend will continue the trend towards enabling a vibrant ecosystem of applications for people living with diabetes. This includes allowing people with diabetes to choose what other applications can access their data. We hope that the combined platform is made open to developers and researchers via secure APIs and that patients always have choice how their data gets used. If patient data gets trapped in a new, bigger, proprietary system, that will not be a great outcome.

What Do Glooko and Diasend Uniquely Bring to This Deal?

  • “Together our mission is to transform the way people with diabetes and their care providers interact and enable them to make smarter healthcare decisions by leveraging the power of mobile, cloud, data, and analytics.” The new combined mission statement is worth noting for the emphasis on (i) making smarter decisions; and (ii) transforming how patients and providers interact – we agree this is exactly what diabetes data should do, and exactly what it isn’t really doing right now. We hope the companies can move fast on the next-gen analytics that truly realize this vision.
  • The enthusiastic quotes from both CEOs in the press release show the joint enthusiasm quite clearly:
    •  “This is without a doubt the best possible scenario for our two companies, as well as for patients and the care teams that serve them. From our standpoint, this means adding even more functionality to an already very strong technical platform.” – Anders Sonesson, CEO of Diasend.
    • “This is a big day for us – we are thrilled to come together to be able to deliver products and services that will offer even more value to patients and healthcare providers around the world.” – Rick Altinger, CEO of Glooko

Glooko Brings...

Diasend Brings...

  • Strong user interface design, particularly on Android and iOS mobile devices (Silicon Valley-minded)
  • Great data analytics and reporting – strong reviews from providers
  • Population Tracker – remote monitoring, telemedicine
  • Next-gen work on basal insulin dosing titration (FDA submission by end of year) and pump settings optimization (entering studies)
  • Clinic Kiosk – Android tablet to download many different devices, rave reviews with Insulet partnership
  • FDA 510(k) experience on hardware and software fronts
  • Notable new integration: Medtronic
  • Impressive device compatibility and data capture expertise – many years of solving this problem
  • Incredible global footprint in 23 countries and 15 languages; sole dominant player in markets like Sweden
  • Understands widely different reimbursement and clinical settings, particularly in EU single payer systems
  • 500,000 active patients at 3,000 clinics, free for patients
  • Diasend Clinic – transmitter to download many different devices works very well for HCPs
  • Notable new integration: FreeStyle Libre
  • We wonder if the combination of Glooko and Diasend can help take some of the software innovation burden off industry. Device companies should arguably focus on building excellent hardware, enabling software experts like Glooko and Diasend to build great user interfaces that maximize the potential of data from that hardware. Of course, companies can and will continue to innovate on proprietary apps and software – it can be a key differentiator – though we expect to see more partnerships that outsource some of the software innovation. We hope all device companies will see the value of sending data seamlessly into these external apps, where the ecosystem can drive far more value than companies can create on their own.

Potential Impact of the Deal and Key Questions

Group

Potential Benefits of This Deal

Key Questions

Patients

- Single platform to download and review data from all devices

- Expected to be free for patients

- Upload at home on web, on mobile, or in clinic

-Synthesized patterns recognition so that patients get glucose summaries in words, not just in charts

- Prioritized care: “Hey Jane, are you doing okay? You have many highs recently.”

- Insulin dose titration software currently in studies

- Will Glooko/Diasend be free for all patients, or only patients from clinics that subscribe?

- How much hassle will Glooko/Diasend upload be relative to company-specific software? For how many devices will it be automatic?

- Will patients bother reviewing retrospective diabetes data, even if it is easier? Or is the future in real-time notifications?

- Will the analysis be highly actionable and useful? What do patients need?

- Will one major diabetes data player reduce competition and innovation?

Healthcare Providers

- Hopefully less time wasted downloading devices in the clinic

- Single platform – less need to use multiple data download products

- Potentially faster clinical workflow with more consistent use of one platform

- Better analytics and clinical decision support as the companies combine efforts (patterns, insulin dose titration, etc.)

- Remote monitoring: “How is my population of patients doing? Who needs help right now?”

- How long will it take for Glooko/Diasend to be plug-and-play with EMRs with low hassle setup required? (Both currently have EMR integrations)

- How much will Diasend/Glooko cost clinics?

- Will providers still prefer certain companies’ proprietary data management products? How much report customization is needed?

- Will Glooko/Diasend make it easy enough for PCPs to handle?

- Will reimbursement improve to support more frequent data review and analysis?

- How much HCP education will be needed? Can Glooko/Diasend take this on?

Payers and health systems

- Risk-stratified care enabled by real-time data – “These 10% of patients need the most help.”

- Real-world device data to inform care and reimbursement – far more learning about what works, for whom, and what devices/care patterns are cost effective.

- Data-informed providers and patients are likely to do better.

- Better in-clinic efficiency should enable better care overall.

- Will payers understand the tremendous value of gathering this data? Which payers will be most interested? Which payers will be the hardest to convince?

- Can payers use data from Glooko/Diasend data meaningfully – to inform care, to reduce costs, to prevent hospitalizations?

- Will it be hard for Glooko/Diasend to show return on investment?

- Will payers reimburse for remote population monitoring or even try to provide it themselves?

Industry

- Now one data management company (Glooko/Diasend) to integrate with.

- As Glooko/Diasend build additional value, internal software innovation might be outsourced (particularly as clinical decision support is added).

- May free up more time to focus on improved hardware

- Will one major diabetes data player (Glooko/Diasend) reduce competition and innovation?

- Will companies still spend significant effort building their own proprietary software?

- What is the right balance between building better hardware, building better proprietary software/apps to make the data actionable, and letting Glooko/Diasend take care of software?

-  How much will software emerge as the key differentiator between diabetes devices?

Interview With Glooko and Diasend

ADAM BROWN: What are you most excited about in the combined product roadmap?

A: Now that we’ve joined forces, we can bring more product and more powerful features to market more quickly on a bigger scale. We’re constantly getting asked, “Can you support this in France for this group of pump users?” We see a way there much quicker as a joint entity. We’re very excited about the original things in each of our roadmaps. As an example, Diasend has Abbott Libre support. Glooko has started work on Libre, but with this deal, we now have it done – just like that. Meanwhile, Glooko has two projects in full swing:

  • Personal advisor – identification of patterns based on the behavior of an individual’s glucose, insulin, mediation, exercise, diet, etc.
  • Clinical advisor – a mobile insulin dosing system for type 2s on basal (FDA submission by end of year) and the MD Logic Pump Advisor for optimizing pump settings (still in user testing).

ADAM: What is your ask of companies in diabetes – what can they do to further support your mission and vision?

A: Invest in connectivity via technologies like Bluetooth and NFC. The market has been slow to invest in connectivity. Companies out there have been pushed to liberate data, and we have helped to change that, but it still hasn’t gone fast enough. We’re pushing hard, to the point where we loaned our Bluetooth expert to device companies to help them do it faster. We’re so invested in getting that information.

ADAM: What companies do it the best?

A: Dexcom gets a lot of credit, and they have been amazing – they are a great partner and we love them. Abbott Libre has a really big vision too, of not only making the data available, but at a price point that is accessible. Since both companies started out, we’ve also gone from a point where each data licensing agreement was hard to get, to now all device companies have been willing to partner and realize the value for both people with diabetes and care teams of making it easy to access the data through a single platform.

ADAM: What would be your key checkboxes for companies out there developing devices? What must they do?

A: OPEN. Set devices up so other apps can openly access the data. It’s a very heterogeneous device market, and more devices are coming out – not fewer. This is a good thing, as long as the data is accessible to people with diabetes. The opposite of open is proprietary. Device companies are seeing the trend towards using data, but some are straddling partnering and wanting to do it themselves. We want to make sure they are doing it in a way that keeps the patient in mind. We need the combination of glucose data next to other data like exercise, diet, medication, pump, etc.

Glooko and Diasend cover 95% of the diabetes device market – nearly every company has opened up, but companies differ in how advanced they are. Some companies like Dexcom share every detail of their communication protocol and how it works. They are open to APIs and cloud integration. You can see the market impact. There is more market pressure to open up.

The big key is making it easy for people with diabetes to access the data. I don’t want to make you go through 20 steps to get data to Glooko. From a technical perspective, cloud sharing is the best – you give Glooko access to the data in the cloud and it gets to us securely in real-time. Whenever we develop integration approaches, we want the most streamlined way to get data for the patients. If there is no cloud option, Bluetooth or NFC is fast and effective. Many of the device companies have newly hired software and data people. In some cases we’re working with 10-year old hardware, and these new teams are trying to figure out how to effectively get the data out of these devices to share.

ADAM: What is your dream for device communication, data standards, etc. Should every company adopt the standards that the Toronto group has been working on?

A: We would love a diabetes data standard. We spend too much time on device integrations, rather than building great software. Manufacturers of diabetes devices see open standards as a business barrier. We need to convince them that it is good business and user value.

ADAM: So these integrations are all one-offs, right? Isn’t that a lot of wasted effort that would be saved with a standard?

A: Yes, if device companies adopted these standards, it would be a heck of a lot less work. We are looking for ways to support our users, but we’re spending time on integrations – but we also know it is worth it because of the ability it gives to people with diabetes and their care teams. People with diabetes want turnkey tools and applications. Most people with diabetes don’t write code or don’t want to in order to access their diabetes data. It’s the mom I met on the airplane that just wants to download something.

We [Glooko] have talked to David Panzirer about this, and part of the funding from HCT for the DreaMed Pump Advisor came from those conversations. We are pushing this concept of data standardization, both within diabetes data and within healthcare. Whenever there is a meeting or conversation around data standards, we’re there. We [Glooko] were presented at an EPIC user group meeting – someone talked about how Glooko is enabling sharing of diabetes data into EPIC. For us, that was a real breakthrough because it showed that an mHealth start-up could work with a large EMR company to improve care.

ADAM: Does it make sense for hardware companies to build software to analyze the data? Should devices companies outsource their software innovation to you?

A: Hardware is not our expertise; that’s diabetes device companies. They know how to do hardware at scale, and we’re not trying to do that. We’re trying to build software. Since the device market is heterogeneous and payers often switch what devices they cover, it is ultimately cheaper and better for the user if companies allow Glooko/Diasend to do it for them.

ADAM: What is the biggest barrier to your long-term vision - e.g., EMR integration, reimbursement for d-data analysis, device communication, regulatory, etc.

A: In a word: speed. The healthcare and device industries can move slow, and our mindset is to move fast. We will continue to be impatient and push, to work with small companies and big companies. The biggest barrier is speed, especially the slowness of the organizations in our ecosystem. In an effort to maintain market share, they drag their feet. It takes innovative companies like Partners Healthcare to really push them to come along. We can now move faster together with diasend.

ADAM: Besides Partners, what other payers understand this?

A: Probably a good 20-30 ACOs in North America have put some of their income at risk, and have prioritized population health and remote monitoring to enable preventative care. They have real vision of moving away from the slow fee for service model and putting some of this at risk and we’ve been lucky enough to partner with them.

ADAM: Where do you see diabetes data evolving in the next five years, particularly as devices and advice becomes more real-time?

A: As data becomes more easily captured, more people can become more engaged with data and know how to integrate it into their daily lives. We’ve seen an evolution of users using mobile devices, and now virtually everyone has access to mobile devices and computers.

For our products our focus is on creating tools to make it easier and easier. With device companies, it’s about Bluetooth and data in the cloud coming to us. We want to translate that data into actionable information that is delivered to the user at the right time in the right place right when they have to make a decision.

We’re excited about the role that Big Data and algorithms can play in self-management and clinical care. It’s not just pump, glucose, or exercise data – our combined vision is bringing it all together and then using it to identify insights through analytics. We’re in a unique position to leverage algorithms and provide insights so people can make better, more optimized personal and clinical healthcare decisions.

One Glooko story that comes to mind: a patient was able to figure out what to eat for breakfast, simply by looking at his own data. He compared bacon and eggs and pancakes, and after seeing the data, he knew what to choose. It made a huge difference in his life.

 

--by Adam Brown and Kelly Close