Since setting up shop in 2006, WellDoc has financed development of its mobile diabetes management tool through debt and angel investment, snagging itself the input of pharma veterans in the process. Now, it has landed its first round of institutional investment, with Merck Global Health Innovation Fund and others committing $20 million.
Merck's ($MRK) financing wing was joined in the round by Windham Venture Partners, a group co-founded by WellDoc angel investor Roger Fine, a former Johnson & Johnson ($JNJ) general counsel. Having secured the investment, WellDoc now plans to push ahead with commercialization of BlueStar, its FDA-cleared mobile Type 2 diabetes management product that requires a prescription. WellDoc received FDA clearance for the product in 2010 but only launched last summer.
As well as the cash, WellDoc thinks it will benefit from Merck's knowledge of the diabetes market and digital health. "When you look at how active Merck GHI has been in investing in digital health, they have acquired a lot of knowledge about technology--consumer technology, digital health technology--you name it. We don't really see that in a lot of other strategic investors," WellDoc co-founder and CEO Ryan Sysko told MobiHealthNews.
All of the leading sellers of diabetes treatments have entered digital health in some form, with Eli Lilly ($LLY), Merck and Sanofi ($SNY) each developing mobile apps to help patients. WellDoc's FDA 510(k) clearance makes it stand out from the crowd, though. Patients receive real-time motivational messages, behavioral coaching and educational content through their mobile devices, while their physicians are provided with clinical decision support tools.
Gaining acceptance for the novel approach is part of the challenge facing WellDoc. The $20 million will help it expand its sales team, and WellDoc is talking to other potential investors that can offer something more than just cash. "We really would like to--and Merck GHI would as well--find a co-investor or maybe multiple co-investors that add strategic value. It could be an institutional VC, a payor, a big data company, or it could be a consumer technology company," Sysko said.
- read the MobiHealthNews article
- here's WellDoc's release