Highlights

• Pioneering new breed of 'digital therapeutics' to help individuals live a chronic disease free life
• Initially targeting Type 2 diabetes and prevention market (>$1 billion market in the U.S.)
• Established global partnership with Merck KGaA (first such program to partner with global pharma)

Introduction

Blue Mesa Health (BMH) empowers individuals to live a life free of chronic disease. Their digital therapeutics program, Transform, helps individuals reduce their risk of diabetes by 60%. They have seamlessly integrated digital tools in a cohesive treatment and prevention program that provides patients with targeted guidance, live coaching, and dynamic tracking of progress.

Type 2 diabetes and other chronic diseases affect approximately 50% of all adults in the U.S. and account for 7 of the 10 leading causes of death. In the case of diabetes specifically, nearly 10% of the worldwide population is classified as pre-diabetic today. This subset is projected to grow to 20% by 2020.

The global healthcare system is having troubling keeping up with the chronic disease epidemic. As evidence, chronic disease accounts for 86% of total healthcare spending, and growing. Today, doctors are not in close enough contact with patients to affect lifestyle behavior changes and the vast majority of treatment options are only introduced to patients once they are well down the path to lifelong chronic disease. We are trending in the wrong direction. The healthcare system is in dire need of solutions that work to prevent and counteract the progression of these conditions before they get to that point.

Enter Transform, a digital diabetes prevention program that delivers a CDC-approved curriculum using a combination of software, connected hardware devices, social peer groups, and professional health coaching.

Transform participant begin with a 16-week high-touch lifestyle intervention. The program reinforces the habits and importance of healthy eating and physical activity, while building the emotional and mental resilience to maintain long-term behavioral change, and reduce their risk for type 2 diabetes. Completion of the 16-week program is followed by 8 months of maintenance support, which aims to solidify the newly formed lifestyle behaviors into habits. From start to finish, the Transform program takes place over the course of a full year.

The company’s long-term vision is to repurpose the Transform model to address the needs of additional chronic disease patient groups, such as those afflicted by cardiovascular disease, mental illness, and others. Beginning with their flagship program for pre-diabetes, BMH is striving to be a global leader in the development of culturally-tailored and technology-enabled programs, helping millions of patients to avoid chronic disease globally and saving the healthcare system billions of dollars in the process.

The Macro View

The U.S. healthcare system, as it stands today, cannot sustain the high cost and resource demand of managing, let alone preventing, the growing chronic disease epidemic. This is primarily due to the fact that chronic diseases largely develop outside of the healthcare setting. It’s best to think about chronic diseases as lifestyle-related diseases, whereby an individual’s lifestyle choices (e.g. activity/stress levels, diet) are directly correlated with their health state.

When it comes down to it, healthcare providers can only do so much and have so much influence from a distance. The true burden of chronic disease prevention and resolution is really on the patient, albeit lifestyle modification is no easy task. In reality, we all know we should eat better and exercise more, but actually making a long-term lifestyle change is another story. So how do we effectively counter this epidemic?

Enter digital therapeutics, a class of digital tools that help people make positive and sustainable behavior change and can be as effective as taking a medication or in some cases, more so (read more on our blog: The Present and Future of Digital Therapeutics). This is a major development wherein digital tools, such as mobile apps, wearable devices, and telemedicine platforms are enabling remote interventions that can compete with chemical therapeutics, less the side effects, and reach the patient without the time and costs associated with having to regularly set foot in a hospital or doctor’s office.

Digital therapeutic programs accomplish this level of efficacy by enabling the continuous monitoring of patient vitals and the ability to confirm and encourage adherence to healthy lifestyle behaviors and prescribed medications. Further, the healthcare community sees opportunities to pair digital therapeutics with proven medicines to increase efficacy.

In recent years, the digital therapeutics space has been making great strides and growing fast. It is estimated that the market will reach upwards of $9B by 2025. A key differentiator for the category is its commitment to clinical validation of its programs and outcome-based reimbursement.

In March 2016, the US Department of Health and Human Services announced that it would reimburse digital therapeutic programs for administering the Diabetes Prevention Program (DPP), a lifestyle modification program clinically proven to be more effective than drug alternatives.

In September 2017, the FDA approved a program developed by Pear Therapeutics and aimed at curbing substance abuse as the first prescription digital therapeutic with claims to improve clinical outcomes in a disease.

Today, digital therapeutic programs are being developed for a number of other disease states, including asthma, insomnia, schizophrenia, PTSD, and heart disease, to name a few. We believe this is just the tip of the iceberg.

BMH Product & Platform

The U.S. diabetes prevention market alone is $1B and represents only a fraction (<1%) of the annual expenditures for diabetes related health costs. This imbalance is critical as the healthcare system continues it shift to value-based care, rewarding cost reduction and disease prevention.

Importantly, BMH’s Transform is offered at no cost to individuals. Large employers and health insurance plans bear the cost of the program in order to reduce their downstream diabetes-related health claim costs. In order to qualify for payment, Transform program must maintain various performance targets relating to patient enrollment, engagement, and health outcomes.

Each participant is issued a Fitbit to track activity levels, a digital scale to track changes in weight, a mobile app that acts as a central program dashboard that collects data, guides patients through the program, and connects each to a dedicated personal health coach. BMH has successfully integrated peer groups into the application, enabling users to experience the program alongside others for an additional source of motivation and support.

Since its launch in May 2016, Transformhas program has enrolled 3k+ participants to date and is adding new users at a rate of ~450/month and growing.

The company has established a number of strong strategic partnerships along the way, including with Solera Health (marketplace for digital and in-person diabetes prevention programs); Mount Sinai (prominent health system) and Anthem Blue Cross (global insurance company).

BMH has taken a customer development approach and focused heavily on customer feedback and validation to guide the direction of its product. This has led to the exploration of exciting new directions.

Where the original Transform program and others in the diabetes digital therapeutic space are focused on the U.S. market, and specifically on targeting U.S. companies and insurance providers, BMH recognizes that diabetes is a global epidemic that affects far more individuals and communities than that particular segment of the market alone represents (e.g. english-speaking, tech-savvy, upper middle class individuals).

To address this, BMH went to great lengths to reach patients outside of this demographic and successfully repurposed the Transform program for two large, underserved patient populations:

- The Hispanic community; and
- Elderly and/or technology-averse users

To do this effectively, adaptation isn't just a language translation. It requires a top-to-bottom repurposing that aligns the program with the nuances of local culture and population tendencies, such as language, ethnic foods and dieting, healthcare system process and interaction norms, tech access and tech savviness.

For the Hispanic community, in the U.S. and beyond its borders, the mobile app and workflow was redesigned from the ground up to be culturally familiar, from healthcare process to lifestyle behaviors to locally-sourced and traditional foods to the backgrounds of its personal health coaches. For the elderly and other technology-averse populations , or those with limited access to technology, BMH has developed a simplified, text-based version of the program.

Diabetes is a global epidemic that BMH wishes to address on that same scale. The intricacies of adapting a program, entering and integrating within new geographies are skills that can only be honed by doing. In bringing its first two program adaptations live, and going on to match the performance of the original english-version, BMH has developed a unique skillset and distinct competitive advantage as it looks to expand to new territories.

When Merck KGaA ("Merck"), a global pharmaceutical company, was searching for the right partner for its global patient engagement initiatives, they immediately recognized this BMH advantage. BMH and Merck have singed a partnership agreement that will facilitate streamlined expansion into new territories, such as Central and South America, Europe/UK, and the United Arab Emirates, areas in which the pharmaceutical company has an extensive network of medical sales reps and government and private partners.

The goal of the partnership is to assess the clinical efficacy, patient engagement, and qualitative patient acceptance of Transform in these new territories. Where necessary, the partnership will fund the repurposing of BMH’s product to account for local language and culture. These sales teams will begin promoting the Transform product, while BMH will be responsible for educating patients and providers and delivering the program. If successful, there is a major opportunity to roll out the BMH program to large adjacent markets with the continued support of Merck's extensive partner network.

Comparable Technologies

The competitive landscape for digital therapeutics and for digital diabetes prevention in general is heavily centered around program reimbursement (i.e. who will pay for it?) In the U.S., it has been established that private companies and private/public insurance companies will reimburse select diabetes prevention programs at no co-pay to the individual. For companies looking to enter the space, they must comply with established program guidelines, leaving little room for deviation.

Chronic disease as a whole and global diabetes care and prevention more specifically is a gigantic and expanding market.

Omada Health is the largest incumbent in this space and recently raised a $50M Series D round. They paved the way to reimbursement and have been evangelizing this approach to therapy and validating the market’s potential. There are also a number of related, smaller players in the space, such as Canary Health and Virta Health. Other companies, such as Noom, HealthSlate and Retrofit are taking alternative approaches, some focusing on general wellness, some focusing on metabolic syndrome and general weight loss.

While these represent competitive offerings, the portion of the potential market these programs command in aggregate is still < 0.1% of the total addressable volume of prediabetics in America. Additionally, these programs are characterized by a one-size-fits-all mentality and a laser focus on the U.S. enterprise market, which serves a distinct patient type. BMH, on the other hand, recognizes the global scale of the diabetes epidemic and has its sights set on the creation of global programs, each tailored to specific populations.

BMH desires to be the international leader in digital diabetes prevention (as a beachhead market) and ultimately in overall chronic disease prevention. The company’s culturally tailored solutions, including its flagship Spanish language program is already serving culturally diverse markets in the U.S. as well as international markets.

Further, BMH, beginning with its Merck partnership, is pioneering the concept of hybrid therapeutics whereby BMH will work with pharmaceutical companies to deliver its program as a culturally tailored first-line standalone program or as an adjunct therapy to existing pharmaceutical programs. This is an area of great interest to pharmaceutical companies looking to shift to value based care as well as engage patients earlier in their care cycle.

With the BMH program currently available in English and Spanish, and soon to be available in Portuguese and Arabic, they are building competency, amassing an increasingly valuable data set, and go-to-market partnerships that will represent a sizeable competitive advantage over others seeking to tackle the global diabetes epidemic.

BMH Patient Testimonials

"I am extremely happy to report that my a1c levels are down significantly. Melanie, I can’t thank you enough for all the support. I am continuing with the program and hoping to stay pre-diabetic or even better diabetic free for the rest of my life. This program really works."

"What I really like about this program so far. It helps me to focus on a life style change gradually and look at how I can improve on my quality life that I already have. I have tried many programs and the Transform program is doable."

"I went to the doctor last Friday she was so happy with the improvements I've made over the past couple months that she cut my visits from four times a year to twice a year and as long as I keep going the way I am my next visit she's going to cut all my medication in half and see if we can get actually get rid of the medication by the end of next year."

"It's been many years, decades, since I've been below 200."

Livongo Health Acquires Retrofit (Press Release, Apr 2018). In a sign that the digital therapeutic space continues to gain momentum, Livongo Health, a large consumer health company recently acquired Retrofit, a digital diabetes prevention tool.

Merck KGaA puts devices to work against diabetes in Blue Mesa digital program (FiercePharma, Feb 2018). Blue Mesa Health was the first digital therapeutic in the diabetes space to partner with global pharma. Merck believes the combination of digital services with pharmacotherapy will have a tremendous impact on patient outcomes.

The Present and Future of Digital Therapeutics (Bioverge, Jan 2018). It’s early days, but digital therapeutics have already proven they can be as effective as taking medication (or in some cases, more so). Bioverge interviewed experts in the space (including Blue Mesa CEO Curtis Duggan) to get their take on the industry today and its potential.

Solera Health and Blue Mesa Health announce Spanish-language Diabetes Prevention Program Partnership (Press Release, Jan 2018). Hispanic adults are an at-risk population, with >50% expected to develop type 2 diabetes over their lifetime. Blue Mesa’s a Spanish-language lifestyle change program was specifically designed for the Hispanic culture and has proven effective at reducing the risk of Type 2 Diabetes.

Introductions to Digital Innovation Officers within Pharma. Blue Mesa Health is interested in connecting with pharmaceutical companies to explore integration of its diabetes prevention platform and development of digital companions to traditional drug therapies.

New Patient or Physician Referrals. Do you know of a pre-diabetes or diabetes patient or clinician that could benefit from Blue Mesa Health's platform? Let's connect them to help advance the mission and impact lives.

Introductions to Value-add Investors. Blue Mesa Health is open to connecting with professional investors capable of advancing the company's mission.