DarioHealth??Corp. (NASDAQ:DRIO), 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.??
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Unfortunately, the??behavioral??health care a person receives today is dictated more by the setting in which a person receives it than what the person would best respond to. ???The result is higher cost care, increased patient attrition and impaired outcomes. 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.?????
Recognized for its product capabilities,??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.??? 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. We believe 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.??
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??hold-backs. 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.??? With??the majority of??the merger consideration being in equity and minimal post-closing investment expected to be required to achieve operational objectives, Dario believes that it will maintain its healthy balance sheet after adding??wayForward’s??scale and capabilities to its platform.??
Approximately 20% of the population has a??behavioral??health need each year, and approximately 29% of people with a chronic condition have a??behavioral??health issue. 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. We believe that this 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.??
“We are excited to join Dario.?????wayForward??was started with the mission to bring precise, readily??available??and cost-effective??behavioral??healthcare to all those in need. We believe that combining our platform with Dario’s best in class solutions for chronic disease will allow us to provide an industry leading product with superior outcomes and member experience and continue on our??mission;??now with an expanded client base. The experience of their team and existing sales & marketing infrastructure will help accelerate sales, reduce customer acquisition cost and maximize the value of our platform,” stated??Ritvik??Singh, Chief Executive Officer and??Co-Founder of??wayForward. “More importantly, the integrated platform will benefit patients who now have the opportunity to utilize the effective combined Dario/wayForward??solution for multiple chronic conditions in a convenient digital experience.”??
“Dario is a strong, flexible AI-driven platform that allows for new offerings to be seamlessly added to our open architecture. Over the last year, we have consistently stated our desire to provide a suite of best-in-class solutions for multiple chronic conditions on one platform, including??behavioral??health as a top priority. We are excited to deliver on our stated goals. We believe the??wayForward??offering and management team will be great, synergistic additions to our technology foundation,” stated???Erez??Raphael, Dario CEO.??
Rick Anderson, President & General Manager of???North America, stated “Adding??wayForward??to our already robust platform allows us to provide a complete solution to our members and customers.??? Our current collaborations with??wayForward??on customer requests for proposal made it clear that they are a natural partner for us.??? It broadens the opportunities for both companies by expanding the customers we can pursue and the number of members in each customer that we can serve.??? We look forward to leveraging our commercial team to accelerate the adoption of??wayForward’s?????solution??on an integrated and stand-alone basis.”??
More information, including an???Dario Health Corp Deck, can be found in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on???May 18, 2021.??
Sullivan & Worcester LLP is acting as legal counsel to Dario in connection with the acquisition.
