Founders: Sami Inkinen (CEO), Stephen Phinney, Jeff Volek
Headquarters: San Francisco
Funding: $366 million
Valuation: $2 billion
Key technologies: Artificial intelligence, machine learning
Industry: Health care
Previous appearances on Disruptor 50 List: 1 (No. 29 in 2019)
Virta Health's origin story is well-known: Sami Inkinen, founder of real estate start-up Trulia, a fitness enthusiast and Ironman competitor, discovered to his surprise he was pre-diabetic and decided in 2014 to do something about it. As a start-up entrepreneur, he co-founded Virta Health with the mission of reversing type 2 diabetes in 100 million people by 2025.
There are 34 million Americans living with diabetes and 88 million who are pre-diabetic at an annual cost of well over $300 billion to the U.S. economy, and that cost has been increasing fast in recent years, according to the American Diabetes Association.
Drugs treating diabetes by keeping blood sugar levels under control have been the health-care norm and major drug companies have made a fortune, with U.S. sales reaching $74 billion in 2020, up from just $7 billion two decades ago, according to IQVIA data cited by Reuters. Type 2 diabetes is also linked closely to additional business models in the obesity market, from weight loss companies and apps to bariatric surgery.
Many patients are told to eat less and exercise more, but Virta Health aims to upend the status quo in general wellness advice, combined with drug reliance. Using technology to connect patients with coaching and remote care, as well as nutritional science, it wants to change the way the medical community thinks about diabetes as a chronic condition — reversing the disease rather than poorly managing it and exposing patients to the additional risks that go along with medication.
The company raised another $133 million last April, nearly doubling its valuation to $2 billion. But it isn't alone in promoting a new technology-led model for chronic health conditions, with Teladoc (it acquired chronic care company Livongo), Omada Health, and Onduo among rivals that have seen increased funding and partnerships.
What sets Virta apart from its competitors is going beyond managing the disease through technology, to seeking actual reversal of it. Each patient has a remote care team — a health coach and a medical provider, and receives behavioral support and encouragement from their coaches and an online community of their peers. Early-adopters have been vocal advocates for its approach: one profiled by CNBC in 2020 tattooed the company's logo on her arm. But the science remains young and the research limited.
Part of its approach requires a drastic reduction in carbohydrate calories (the science of nutritional ketonosis), and it has yet to be proven that this is a sustainable approach for long-term diabetes management. Virta clinical trial results from 2019, while showing both reversal and in other cases remission of diabetes, only cover a few years of treatment. In 2021, it published peer-reviewed research on Virta's treatment of prediabetes, showing that only 3% of trial participants progress to type 2 diabetes during the first two years. Additional research has shown that its approach can reduce another byproduct of diabetes: depression in patients on conventional treatment.
The Virta Health model is being embraced by more corporate health care plans, health systems and insurers. Virta has expanded to over 200 customers as of late last year, including major insurers Providence Health Plan and Humana, which signed a deal last year to offer Virta's diabetes reversal treatment to employer groups. It now works with more than 20 national and regional health plans, marking 133% year-over-year growth with large insurer customers, nearly half of which now offer Virta's diabetes reversal treatment to their employer groups. That represents thousands of companies and over five million individuals. The company is growing its staff to keep up with the deals, doubling headcount to 400-plus employees in 2021.
The approach is gaining more acceptance from the academic community, if not by specific name in the case of Virta, at least in terms of the concept of reversing the disease as medical aim. In August of last year, the American Diabetes Association, the Endocrine Society, the European Association for the Study of Diabetes, and Diabetes UK released a consensus report that defined diabetes reversal for the first time.
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