What You Should Know:
– DarioHealth Corp., a pioneer in the global digital therapeutics market, today announced it has entered into an agreement to acquire PsyInnovations, Inc. (dba wayForward), a behavioral health digital platform that includes AI-enabled screening to triage and navigate members to specific interventions, digital Cognitive Behavioral Therapy (CBT), self-directed care, expert coaching and access to in-person and telehealth provider visits.
– The wayForward platform fills an all-too-common hole in existing behavioral health coverage for people who may not need or be able to access provider-based treatment. wayForward is currently providing its full suite of digital behavioral health services to approximately 20,000 members and 20 self-insured employers.
– With the addition of wayForward’s solution, Dario’s platform is one of the most comprehensive multi-condition solutions in the industry covering diabetes, hypertension, pre-diabetes, musculoskeletal and behavioral health.
– Post-acquisition, Dario’s platform will cover 6 of the 7 top benefit areas employers seek to address, according to a survey by Mercer. The acquisition enhances the integrated care that Dario’s platform can provide and substantially increases the portion of customers’ population that may be eligible for Dario’s services.
Acquisition Financial Details
Under the terms of the merger agreement, Dario agreed to pay $30.0 million of consideration, with $25.0 million due at closing and a future contingent payment of up to $5.0 million if behavioral health revenues from the Company exceed a certain threshold in 2022. The upfront component of the purchase price will be paid by a combination of $6.0 million in cash and $19.0 million in shares of Dario common stock. Dario will issue approximately 891,182 shares of common stock at the closing, which is subject to customary closing conditions and holdbacks.
If earned, the contingent payment will be paid in shares of Dario common stock. The number of shares issuable in the transaction was determined based on the 60-day volume weighted average share price (VWAP) of $21.09 that ended on May 14, 2021. These shares will be subject to a mandatory lock-up over a 6–18-month period. wayFoward is expected to be accretive to revenue in 2021 with substantially more contribution to revenue in 2022.
WayForward Platform Overview
The wayForward platform is unique in the industry in that it focuses on AI-based screening, digital tools and coaching to match members to the optimal level of care, including those who may not require care by a licensed clinician psychologist or psychiatrist, while providing access to those providers through a customer’s existing network or partners’ networks. This results in improved engagement and clinical outcomes. Very few solutions in the market provide the clinical rigor of digital CBT and coaching as the first line of care. Rather than competing with existing in-person and telehealth-based solutions, wayForward integrates with them seamlessly. This creates a pathway to work collaboratively with other behavioral health solutions and provider networks rather than compete with them.
wayForward has won innovation challenges with Anthem and Blue Cross BlueShield of Illinois and has demonstrated strong member utilization and clinical outcomes, including a 48% reduction in anxiety and a 59% reduction in depression in third-party studies. The ability of the wayForward platform to integrate with third parties streamlines interoperability and is consistent with Dario’s philosophy of making behavior change easier.
Post-Acquisition Plans
The wayForward team, including its two founders, Ritvik Singh, CEO of wayForward and Dr. Navya Singh, Chief Clinical Officer of wayForward, will join the Dario team. Dario believes that wayForward’s base of self-insured employer customers validates the commercial opportunity, and there will be immediate combined value in leveraging Dario’s sales and marketing organization and wayForward’s technology organization in India.
