What You Should Know:
– DarioHealth, a Livongo competitor acquires musculoskeletal startup Upright for $31 million to expand their chronic condition management capabilities focused on driving behavior change rather than treating the acute problem. This move will more than double revenue and create one of the largest integrated digital health companies in the space.
In addition, DarioHealth rasiess $70 million through a private placement of its common stock priced at the market pursuant to Nasdaq rules.
DarioHealth Corp, a provider of global digital therapeutics (DTx) market, announced it has reached a definitive agreement to acquire digital musculoskeletal (MSK) company Upright Technologies Ltd. for $31M in stock transaction. The acquisition will expand its chronic condition portfolio, currently including self-management of diabetes and hypertension, into musculoskeletal conditions.
More than half of Americans report a chronic musculoskeletal condition in any given year, and nearly one in five healthcare visits are for a musculoskeletal issue. High comorbidity overlap exists between musculoskeletal conditions and diabetes, with more than 75 percent of patients with Type 2 diabetes or obesity reporting at least one joint mobility issue.
Founded in 2014, Upright is a leading digital MSK health company focused on preventing and treating the most common MSK conditions (back, neck, shoulder care) through behavioral science, biofeedback, coaching, and wearable tech. Integration into a user’s life is key to impacting behavior and health outcomes. Unlike solutions that connect users to the physical therapist or provide purely digital based education and coaching, Upright is part of user’s everyday activity with an average usage of 5.5 hours per day across their platform, compared to the industry average of 15 minutes per day.Today, Upright has over 90,000 active users and its clinically validated solution is recommended by more than 500 clinics worldwide.
“Similar to Dario, we have had great success building our product with roots in the D2C market and have begun to make inroads into the B2B space. We believe there are significant synergies that can be derived from being part of a broader digital health platform,” stated Oded Cohen, Chief Executive Officer and co-founder of Upright. “We believe that together with Dario, we can deliver an integrated, scalable, virtual platform to reduce employer, payor, and provider healthcare costs and offer lasting and impactful health outcomes for end-users. Dario stands apart from the rest with their shared consumer history and user-centric culture, and I look forward to working with Erez and the team to drive this next phase of growth.”
Dario plans to integrate Upright’s MSK solution to its digital therapeutic platform, which represents one of the most comprehensive multi-chronic condition platforms in the market with approximately 150,000 users. It brings together complementary companies with industry-leading consumer engagement and clinical outcomes delivered through a platform that combines advanced sensors, dynamic AI-driven behavior change, member journeys, and coaching.
“MSK represents substantial costs to our customers and drive a large percentage of employee absenteeism and lost productivity. It is consistently one of the top priorities for clinical improvement and cost reduction for self-insured employers and health plans. Adding Upright’s solution to our integrated platform will substantially expand our opportunity to address a broader spectrum of our customers’ needs,” stated Rick Anderson, Dario’s President and General Manager of North America. “In addition, Upright’s focus on building a solution loved by its members, its high level of engagement, and proven approaches in driving sustainable behavior change, make it the perfect fit for us. Our commercial team is excited to take our new integrated solution to current and prospective customers.”
As part of the acquisition, Upright’s CEO and co-founder Oded Cohen will serve as Dario’s General Manager of MSK product and will join Dario’s Board of Directors.
Upright Acquisition Financial Details
Dario agreed to acquire Upright for $31 million with $29.5 paid in stock and $1.5 million in cash; after deducting outstanding debt and making working capital adjustments, the number of purchase shares issued was determined based on the closing price of Dario’s shares on the day prior to the signing of the term sheet, subject to a share price collar which takes into effect recent market activity post-signing. Dario will issue approximately 1.7 million shares of common stock to Upright shareholders at the closing, which is subject to customary closing conditions and expected to take place on or about February 7, 2021.
Raises $70M in Private Placement Funding
Dario has concurrently announced definitive agreements with a syndicate of highly regarded healthcare institutional investors to raise $70 million through a private placement of its common stock priced at the market pursuant to Nasdaq rules. Dario has executed securities purchase agreements for the sale of an aggregate of 3,278,688 shares of its common stock at a purchase price of $21.35 per share. Dario intends to use the net proceeds from the offering for general corporate purposes.
