Source : Medtech Insight
The skyrocketing demand for telemedicine and expansion of reimbursement for telehealth visits due to COVID-19 is likely going to shift the paradigm for diabetes care delivery into the future, setting up diabetes software company Glooko, Inc. for continued growth.
When the first shelter-in-place regulations kept diabetes patients from seeing their doctors in the office due to the pandemic, the Mountain View, CA-based company announced it would offer its remote patient monitoring platform for free to both patients and clinics and continues to do so – at least for now, Glooko’s CEO Russ Johannesson told Medtech Insight in a recent interview on the company and its outlook.
Russ Johannesson, Glooko CEOGlooko
“It was obvious that telehealth and remote care was going to be important to keep people with diabetes safe at home,” Johannesson said. “While they don’t necessarily have an increased chance of catching COVID-19, when and if they were to catch it, the complications can be much more grave and severe given the comorbid conditions. So, we felt it was really important to offer our solution for free globally immediately.”
Like other digital health companies, the acceleration of remote monitoring and telehealth visits since the start of the pandemic has been a boon for Glooko. The privately held company transitioned in 2018 from a hardware-plus-app startup to a software-as-a-service company with an US Food and Drug Administration-cleared, HIPAA-compliant, connected care data management platform in 2018.
“The pandemic has had a significant impact on our business on the usage of both our in-clinic solution and our mobile application, as well as the nature and the structure of the partnerships that we are a part of.” – Russ Johannesson
The Glooko platform supports partners’ hardware and integrates device data for use by providers, researchers, health systems and patients. It is an agnostic solution that integrates 95% of all diabetes devices on the marketplace. Glooko has more than 190 partnership with device makers, including the major continuous glucose monitoring systems maker DexCom, Inc. and insulin pump makers such as Medtronic plc, Insulet Corporation and Novo Nordisk A/S as well as major fitness trackers. Glooko has roughly 965,000 users globally and serves about 7,500 clinics in 26 countries.
“The pandemic has had a significant impact on our business on the usage of both our in-clinic solution and our mobile application, as well as the nature and the structure of the partnerships that we are a part of,” Johannesson said. He declined to give revenue figures but said that Glooko has seen growth across all of its businesses, which he attributed directly to the pandemic-driven changes. In 2020, Glooko saw a 30% revenue growth compared to 20% growth in 2019, which is expected to accelerate to 50% revenue growth in both 2021 and 2022.
Glooko’s business model includes three different revenue streams.
The first comes from providing connected care solutions to health systems and clinics, allowing providers to remotely manage their diabetes patient population. Glooko charges a monthly access fee per patient, which “supports the reimbursement that we’re seeing both in the US and other countries around the world,” Johannesson explained.
The company announced on 5 March 2019 that it would offer its mobile app for free for any person with diabetes. Previously there was a subscription fee for individuals not sponsored through their provider, health plan or employer. Johannesson said that, rather than marketing the app to consumers directly, Glooko has found that asking physicians to invite patients to download the app for free creates “better engagement” with patients.
Glooko app Glooko
About 44% of the company’s revenue is derived from that part of the business; roughly 43% of revenues come from strategic partnerships with pharmaceutical companies and device makers, where the opportunities range from joint development of capabilities like mobile solutions to data subscription models. The remainder comes from data support for clinical research organizations.
“The shift in reimbursement models are driving that provider side of our business to grow faster than the other ones,” he said.
Use of the company’s remote monitoring platform has risen 50% during the pandemic and telehealth uptake in reimbursement for telehealth visits. According to data from FAIR Health, an independent non-profit group that publishes the Monthly Telehealth Regional Tracker, telehealth claim lines increased 4,347% nationally from March 2019 to March 2020, when President Trump declared COVID-19 a national emergency.
With the easing of COVID-19-related restrictions, more patients returned to see their doctors, but Johannesson believes that “tele-diabetes” will continue to play a major role in the future. Anecdotal evidence from Glooko’s health partners suggests that telehealth visits could make up 20-40% of all visits post-pandemic.
“What we've found is both the care teams and the patients are now comfortable with that approach … historically, pre-pandemic, an average person with diabetes would be in clinic seeing their physician on average three to 3.2 times per year. And we think that for more intensive patients that will likely continue, but then also on top of that will likely be check-ins remotely [driven by quality of care and reimbursement models],” he said.
Glooko has also seen rising demand for data support to clinical researchers for both randomized trials and virtual clinical trials, allowing researchers access to data from patients’ devices without them having to physically visit with an investigator. Johannesson pointed out that the company started investing in the clinical research platform two years ago, which includes FDA 21 CFR Part 11 and HIPAA compliance.
“It just happened to be good timing for when the pandemic hit” and there was a rising demand by clinical research organizations to remotely access data, he said. He declined to offer details on trials, other than that the company is working with some of the largest clinical research organizations on trials related to pharmaceuticals and medical devices. ()
“Clinical research is about 13% of our revenue mix today and we think that will continue to grow,” he said. “It may not grow as significantly as a percent of our revenue, but it will be growing considerably over the coming years as we continue to expand there,” he said.
The rising adoption of continuous glucose monitoring systems such as Abbott ’s FreeStyle Libre and Dexcom's G6 and insulin pen systems like Nova Nordisk’s and Medtronic’s that provide real-time data and more insights has also greatly accelerated the amount of data that comes through Glooko’s platform. But he stressed that the company has made the necessary investments to develop “enterprise-grade” solutions to ensure alignment with the changing regulatory landscape.
“We have over 20 billion data points and are growing exponentially right now,” Johannesson said. “It allows us to be sitting on top of the world’s largest … database for diabetes. We think that’s really powerful in the management of diabetes … having that frequency and reliability of data points to then be able to measure and track against other factors that impact someone’s blood glucose level, their activity levels, their nutrition, their carb intake ... which is what the Glooko platform does … it creates insights out of the intersection of all of that data. Having more data points gives clinicians and the care team and patient the personalized insights to make better treatment decisions and manage disease."
On 28 October, Glooko also announced a new partnership with the Diabetes Technology Network/Association of British Clinical Diabetologists to create an online medical program to educate clinicians in the UK on the use of diabetes technologies and reduce barriers to the adoption of digital tools.
Johannesson said the program, which is free to all diabetes health care professionals in the UK, was inspired after discussions with the National Health Service England. Glooko provided the funding to get the program off the ground is now backed by major industry sponsors including Abbott, AgaMatrix Holdings, LLC, Dexcom, Insulet, Medtronic and Roche Diabetes Care. Glooko hopes to train more than 300 diabetes clinics and said it is off to a “strong start in surpassing initial goals of sign-ups of clinicians.” Ultimately, Johannesson hopes to roll out the program to other markets, including in the US, and educate patients on new diabetes technologies.
“We think it’s really an important opportunity to help health care providers to stay current on the use of this technology and the new technologies that do come out and it creates an opportunity since the micro-learning modules are relatively small – a few minutes of content – we can update that and we can change it out as developments happen and keep it fairly current,” he said.
To support ongoing sales and marketing opportunities, Glooko is hoping to raise $22-25m in a series D round of financing. “That is underway right now and we’re looking to close that in Q1 of next year, if not sooner,” Johannesson said, adding that Glooko is on its way to profitability. The company raised $13m in July 2019 and $35m in a series C financing round in 2017 with financial backing from Medtronic and Insulet.
Johannesson feels the time is right to take advantage of some of market opportunities. He also has big plans for 2021.
He wants to expand the platform geographically from now 26 countries and 15 languages to 30 countries and 19 languages. He is also in discussions with partners to expand the platform into Latin America and in Asia Pacific markets in 2021 and beyond.
He is also exploring opportunities to create solutions that address comorbid conditions of diabetes by managing data coming through devices or leveraging data that Glooko already collects through clinical trials or population health offerings.
“Diabetes is a condition that has many comorbidities and we do share data in support of management of things like hypertension and obesity and cardiovascular disease as well and we’re looking at expanding our ability to have impact there and our capabilities over the next couple of years, so that we aren’t necessarily diabetes-specific over the next couple of years but we expand into other chronic conditions,” he said.
The company is planning for organic growth but is also looking for tuck-in acquisitions to accelerate the expansion into other chronic conditions and potential acquisitions to expand its footprint into new markets.
Venture investors have bet increasingly on digital health start-ups. In the first three quarters of the year, venture capitalists put $9.4m into digital health start-ups, which topped the previous yearly high of $8.2bn in 2018, according to San Francisco-based venture fund Rock Health.
These tailwinds have also given rise to increasing M&A activity in the sector. Telehealth giant Teladoc Health, Inc. bought Livongo Health, Inc., one of Glooko’s biggest competitors, for $18.5bn in August. Livongo was also performing well on its own and ranked among several digital health companies to have a successful IPO in 2019. ()
Johannesson said he wants to keep his options open in terms of Glooko’s ability to raise funding.
“There’s many vehicles – whether it’s IPOs, IPOs through SPACs (also known as blank check companies), or other things that are becoming quite hot right now,” he said. “We’re trying to stay focused on growing the business and continue to add value ... I wouldn’t want to signal anything imminent at this point, but we’re always looking at what is the most effective way to capitalize the business going forward and those options continue to be interesting.”
By Marion Webb