DarioHealth Stock

DarioHealth Corp. (Dario) operates as a direct-to-consumer digital therapeutics company.

The company’s solutions combine the power of technologies and behavior science to make better health accessible, affordable, and easy for all by solving for what people need, when and where they want it, with hyper-personalized care that is always connected – to services, devices, and people – and delivered continuously. The company’s solutions are proven to drive savings for health plans and employers by improving g the health of their populations.

The company is solving first for the problem of how to engage users and support behavior change to improve clinical outcomes in diabetes. Beginning in 2020, Dario enacted a strategic shift to transform the business model by deploying a business-to-business-to-consumer (B2B2C) approach, leveraging the strengths of the company’s consumer solution platform to enable commercial growth opportunities in traditional health business channels by selling to health plans and employers.

At the same time, the company expanded from a single-condition platform to a multi-condition platform, creating a robust suite of solutions to address the five most commonly co-occurring, behaviorally driven, and expensive chronic conditions, which are also representative of some of the most sought-after digital health solutions: diabetes, hypertension, pre-diabetes/weight management, musculoskeletal and behavioral health. After building weight loss and hypertension management into the legacy diabetes platform, the company made three acquisitions in order to expand into musculoskeletal (MSK) and behavioral health (BH). In that regard, the company acquired Upright Technologies Ltd. (Upright), PsyInnovations Inc. (PsyInnovations) and Physimax Technology assets to expand into the fields of musculoskeletal (MSK) and BH. The company continues to generate a significant number of clinical publications.

Recent Developments

Integration of Dexcom CGM Data

The company collaborated with Dexcom to integrate the data from its market-leading Continuous Glucose Monitoring (CGMs) technology, which uses a small, wearable sensor to continuously measure and send glucose levels to a receiver or smart device to enable better real-time decision making for people living with diabetes, into its multi-chronic condition platform. This partnership, signed in early 2023, enables the integration of data from Dexcom CGMs directly into the company’s metabolic solution, making it easy for people using the wearable device to benefit from its highly personalized support.

Sanofi U.S. Services Inc. (Sanofi)

The company’s 2022 agreement with Sanofi continues to evolve after the first year of its agreement across all three pillars of the agreement. First, the company’s co-promotion efforts are yielding a healthy pipeline of health plans and Pharmacy Benefit Managers (PBMs), and it has several opportunities in or close to contracting. Second, the company’s product development has yielded several new features in beta testing with its consumer membership. The company expects that these features will be released more broadly to the market in the spring of 2023. Third and finally, the company is preparing its first two research studies with Sanofi with the release of data expected in the summer of 2023.

Product Offering

The company’s user-centric software platform integrates digital therapeutics, coaching, professional human support and medical devices to drive superior clinical and financial outcomes. The company’s best-of-suite suite of offerings is modular, allowing for enterprise clients to purchase one or more of its chronic condition management solutions, while enjoying the same best-in-class experience supported by its behavior change journey engine so its partners can be confident in achieving sustainable outcomes and value. The company’s suite of digital offerings includes:

Dario Metabolic (Dario Evolve)

The company’s metabolic solutions are designed to address some of the most commonly co-occurring metabolic health needs - diabetes, pre-diabetes, hypertension, and weight management - through a combination of software, its smartphone-connected tools, interaction with live coaches, and real-time data analysis to help inform and educate users of the relationship between their behaviors and their health outcomes to drive changes that last.

Dario Musculoskeletal (Dario Move)

The company’s unique approach addresses the most common MSK conditions, including chronic pain, by dealing with the cause and empowers users to create behavioral change. Dario Move’s digital physical therapy programs and posture training help people improve strength and mobility by using a combination of software, wearable biofeedback sensors, and coaching to drive sustainable improvements in musculoskeletal health. The inclusion of posture training in the solution supports ongoing engagement in support of prevention and maintenance outside of an exercise therapy program.

Dario Behavioral Health (Dario Elevate)

The company’s behavioral health solution optimizes access to evidence-based care by using an AI-driven screener to triage users and connect them to the most appropriate support across a wide range of mental health needs, including its integrated digital tools and coaching, giving users a seamless path to proven mental health support.

Dario Full Suite (Dario One)

The company’s full suite of chronic condition management solutions offers the maximum benefit for its partners with a completely seamless and holistic approach to managing chronic conditions. In addition to a better unified member experience, the company’s partners deploying Dario One enjoy several benefits from purchasing the entire suite of solutions: better overall health as evidenced by recent research published by it; the convenience and ease of a single vendor to manage; less strain on internal resources spread across several chronic condition management programs; and a more affordable program launches due to lower costs of implementation.

Dario’s Solution Main Components

Users vary significantly in their interests and preferences, and unique user preferences also vary over time with respect to the optimal timing, tone, content, channel, frequency, and interventions required to produce sustained behaviorchange. Users’ interactions with devices, smartphones, coaches, providers, and third-party solutions must be personalized along these axes to ensure optimal engagement, retention, and outcomes. Furthermore, to engage and sustain user interest and participation, and drive outcomes, platforms must be dynamically responsive.

Key to the company’s ability to accommodate user behavioral changes is its mature AI-driven user journey engine. While several in-market solutions integrate health signals across a range of categories to apply limited, nominal personalization, primarily in the form of nudges, the company’s solution is informed by years of user experience data from over 250,000 users that joined its chronic-condition platform, enabling it to continually personalize and adapt user journeys themselves (and not just messages) over time. The company’s journey engine drives its multichannel targeted outreach and enrollment campaigns, informs specific recommendations around a range of categories, such as diet, physical activity, self-care, coaching interventions, and provider engagement, and evolves in real time in response to the data exhaust from a user’s interaction with the care ecosystem.

The company’s journey engine combines complex behavioral science insights with data from hundreds of thousands of users over several years to recommend AI-driven initial and updated care journeys in response to a user’s engagement with the platform. Most digital health solutions consist primarily of tracking, content, and nudges. These are often perceived by users as non-rewarding work, and often do not feel relevant to their concerns, particularly as they evolve over time. The company’s journey engine adapts user journeys to drive engagement, retention, and clinical outcomes by optimizing timing, tone, channel, content, frequency and intervention to deliver dynamically personalized user journeys that are more likely to result in the behavior changes needed to drive improved outcomes across a range of conditions. As it partners with solutions in additional conditions or categories, the company engages new populations and generate fresh insights, enhancing the engagement and efficacy of these partnered solutions to deliver additional value to its users.

Software Applications

The company’s chronic condition management solutions are designed as three separate software applications to provide the best possible user experience across metabolic, MSK and behavioral health needs. Each application is integrated with Dario’s single digital therapeutics platform and behavior change journey engine to ensure the same hyper-personalized experience across each person’s unique health needs and preferences to keep them on track with healthy changes over time.

Dario Evolve

Dario Evolve helps users change their behaviors and help better manage their diabetes, blood pressure and weight. Using real-time data and analysis, the app helps users track their progress and offers real-time feedback and customized content to support each individual’s needs and goals. Integration with the Dario journey engine ensure that each user receives holistic support and a highly personalized experience that keeps them on track for long-lasting results.

Dario Move

Dario Move helps users improve strength and mobility to help address chronic pain and improve overall musculoskeletal health. After completing an online assessment, each user receives a personalized, evidence-based exercise program that can be adjusted throughout their journey based on sensor data or self-reported feedback to a coach or in the app. Dario Move guides members through their tailored program with educational content to support long-term outcomes.

Dario Elevate

Dario’s Elevate helps people get the help they need to address common mental health needs. Starting with a responsive, AI-driven screener, elevate triages users to understand the need and recommend the most appropriate support to help them feel better. The company’s integrated, evidence-based digital tools and coaching help people learn proven techniques to better manage their emotional health.

Live Coaching

Live coaching is available as part of the Dario experience to give members a human point of contact for support and motivation, and also provides a level of accountability that is proven to help improve engagement and outcomes. As an integrated component of its suite of solutions, the company’s professionally trained and certified health coaches serve as a personal support for each member throughout their journey across all solutions and are able to connect members with clinical experts when members need additional support. The company’s clinical coaches include Certified Diabetes Educators (CDCES), Registered Nurses, Pharmacists and Mental Health Clinicians who are able to assist members throughout their journey.

Dario User Devices

The company’s product offerings include integrated devices to capture relevant clinical and biofeedback data to support continuous, real-time monitoring of member health. The company’s native devices include all-in-one smart glucose meter; Bluetooth connected blood pressure cuff; digital scale; and biofeedback sensor device.

Commercial Channels

The company is focusing the go-forward business strategy around three key market opportunities: direct sales to employers and payers and partnerships with the ability to multiply its growth opportunities. The company’s scalable business model selling digital therapeutics as a service through multi-year contracting relationships establishes a pipeline of ARR and has the potential to improve its gross margins over time.

The company’s software solutions are sold across a range of channels to create multiple growth engines and support rapid adoption across all segments of the market. The company’s integrated product suite is designed to address a common and growing sentiment from enterprise customers expressing frustration with the large number of condition-specific solutions, lack of transparency, lackluster results and poor member experiences. The company’s integrated solution aligns with these key buyer pain points and is proven to deliver value to strategic partners through its differentiated approach in the market. Finally, the company’s consumer-centric legacy remains a key component of its commercial strategy, bolstering its ongoing solution development by serving as an innovation laboratory for new services and product enhancements.

Health Plans: Although health plans represent the longest and most complex purchasing cycle across the company’s client base, these contracts often represent sizeable opportunities as they typically offer much larger potential member populations. The company has three live contracts with health plans, two are regional payers and one is a large national plan, with several additional plans in negotiation and contracting at present day.

Employers: The company’s most robust growth in 2022 came from the employer market, a key buyer to help demonstrate its ability to deliver results.

Partnerships: Strategic partnerships play a key role in helping to expand the company’s reach across markets quickly and efficiently. Significant partnership agreement is the company’s collaboration with Sanofi, a global leader in health care, a relationship that resulted after an extensive search determined it is uniquely capable of providing the robust data and analytics required by Sanofi. The company also entered into partner agreements with several large employer benefits platforms, such as Virgin Health Pulse in 2021, helping expand its reach within the employer market.

In addition to its partnership with Sanofi, Dario is actively pursuing distribution partnerships in both the payer and employer verticals. In 2022, the company partnered with Solera to establish a payer channel through their large network of plans. The company also entered into partnership agreements with several large platforms such as Virgin Health Pulse, Alliant Insurance Services, and Vitality Group, helping expand its reach within the employer market. Dario is actively pursuing new partnerships in both markets in 2023 to enhance the company’s opportunities with a one-to-many approach.

Consumers: The company’s ability to engage members and improve health begins with its consumer-centric approach, and this audience remains key to its commercialization at the enterprise client level. The company’s direct-to-consumer channel continues to attract members to ots platform and provides a neutral audience to test innovative product ideas, something traditional B2B companies are unable to do given limitations on commercial membership.

Sanofi U.S. Agreement

On February 28, 2022, the company entered into an exclusive preferred partner, co-promotion, development and license agreement (the Agreement) with Sanofi for a term of five (5) years. Pursuant to the Agreement, the company and Sanofi will co-promote certain of its products and services, including devices and accessories, and to develop new products and services based on insights derived from its data relating to the use of those devices and services. In addition, the company granted Sanofi a license to access and use certain of its data, and Sanofi granted it a license under certain intellectual property of Sanofi for purpose of developing and promoting certain products and services for Sanofi in the United States.

Intellectual Property

Patent applications

On May 8, 2011, certain of the company’s founders filed a Patent Cooperation Treaty (PCT) Application No. PCT/IL2011/000369, titled Fluids Testing Apparatus and Methods of Use.

A PCT search report and written opinion on patentability that the company received from World Intellectual Property Organization (known as WIPO) that included only two Y citations and one additional non-relevant reference. Corresponding national applications of the company’s PCT were filed in the U.S., Europe, Japan, China, Australia and Israel.

On May 1, 2014, the company announced the receipt of a U.S. Notice of Allowance for a key patent relating to how the Dario Blood Glucose Monitoring System draws power from and transmits data to a smartphone via the audio jack port. This patent was issued as U.S. Patent No. 8,797,180 in August 2014, and in August2015, the company received U.S. patent (No. 9,125,549) that broadened its registered patent No. 8,797,180 to include testing of other bodily fluids through an audio jack connection. Further, a corresponding European patent was granted to the company in May 2016, as European patent No. 2569622 for testing of fluids through an audio jack connection. An additional corresponding patent was granted in Israel in April 2016. In February 2016, the company was granted U.S. patent No. 9,257,038, which is a further Continuation application connected to the U.S. patent No. 8,797,180, this new patent enhanced the way the Dario Blood Glucose Monitoring System communicates with the end user’s smartphone devices.

In November 11, 2017, U.S. patent No. 9,832,301 titled Systems and methods for adjusting power levels on a monitoring device was granted. This patent enhances the way the Dario Blood Glucose Monitoring System communicates with users’ smartphone devices. This family includes a corresponding pending application in China.

Additionally, the company recently received U.S. patent No. 10,445,072 that enables optical communication between the Dario Blood Glucose Monitoring System and the end user’s smartphone devices.

In early 2022, the company acquired Physimax and acquired the following patent – US 10,709,374 B2 titled System and Method for Assessment of Musculoskeletal Profile of a Target Individual.

This patent was also submitted as EP application #19767795.8 on the 05/03/2019 and is pending.

Design patents and patent applications on the Dario Blood Glucose Monitoring System

To further protect the company’s market distinction and branding for the Dario Blood Glucose Monitoring System, three U.S. Design Applications have been filed and granted covering the glucose meter, the cartridge, and connection dongle. At least some of these applications were granted and registered in the United States, as well as Brazil, Canada, China, Europe, and Hong Kong.

Trademark applications

The company has also filed several families of trademark applications covering the Dario name (wordmark), the Dario name and logo (logo), the Dario logo alone (logo), the DARIO-LITE wordmark, the LABSTYLE INNOVATIONS wordmark, the DARIOHEALTH wordmark, and the DARIOHEALTH logo. In particular, the Dario wordmark is registered as a trademark in the Australia, Canada, China, Costa Rica, United States, Israel, China, Canada, Hong Kong, South Africa, Japan, Costa Rica, Europe, Israel, Japan, Korea, Mexico, New Zealand, Panama, Russia, South Africa, and the U.S.A. The DARIOHEALTH wordmark is registered as a trademark in the United States, Canada, China and India.

Upright also added the following trademarks to the company’s list: UPRIGHT, UPRIGHT GO – registered in the US, AU and EM, and UPRIGHT DASHBOARD, UPRIGHT DESKTOP, UPRIGHT GO 2, UPRIGHT PRO, UPRIGHT POSTURE IS WITHING REACH – registered in the U.S.

Utility Models

The company has been granted Utility Models for its core invention in Japan and Germany.

Research and Development Expenses

The company’s research and development expenses included $19,649,000 for the year ended December 31, 2022.

Competition

Certain of the company’s competitors offer this integrated approach in varying degrees, including, among others, Hinge Health, Inc., Livongo Health Inc. (acquired by Teladoc Health Inc.), Omada Health, Inc., Vida Health, Inc. and Virta Health Corp. Customers of the company’s competitors suffer an inadequate user experience, as evidenced by few app store reviews and low scores in Apple, Google and Amazon stores.

Government Regulation

The Dario Blood Glucose Monitoring System is classified as a medical device and subject to regulation by numerous agencies and legislative bodies, including the United States Food and Drug Administration (FDA) and its foreign counterparts.

In September 2013, the company obtained ISO 13485 certification for its quality management system and CE Mark certification to market Dario. In May 2015, Dario was cleared to fulfill the criteria according to EN ISO 15197:2013 The granting of the CE Mark allows Dario to be marketed and sold in 32 countries across Europe, as well as in certain other countries worldwide.

On November 21, 2014, MDSS, the company’s European Authorized Representative, completed the registration of the Dario Blood Glucose Monitoring System with the German Authority as required by Article 10 of Directive 98/79/EC on in vitro diagnostic medical devices.

The company achieved regulatory clearance to market Dario in other countries that do not rely on the CE Mark. As of December 31, 2021, the non-CE Mark jurisdictions, which the company has begun to market Dario include the United States, New Zealand, Canada, and Australia.

History

The company was founded in 2011. It was incorporated in Delaware 2011. The company was formerly known as LabStyle Innovations Corp. and changed its name to DarioHealth Corp. in 2016.