Livongo reported stronger-than-anticipated revenue in Q1

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Digital therapeutics (DTx) firm Livongo reported stronger-than-anticipated sales in the first quarter of 2020, according to FierceHealthcare. Livongo credits its sales growth to the more than 620 client launches it had in the first quarter of 2020, compared with 231 client launches in the first quarter of 2019.

While the pandemic has digital health startups like Virta Health reeling, Livongo's focus on remote patient monitoring and telehealth has benefited the firm as stay-at-home orders are being enforced across the US. The global coronavirus health crisis has had varying impacts on the performance of digital health startups: For example, diabetes coaching startup Virta Health has laid off some of its employees due to the economic downturn generated by the pandemic, while telehealth titan Amwell's patient visits have been up approximately 257% nationally compared with the same time last year.

Livongo's success has been driven in part by the DTx firm's focus on differentiated remote patient monitoring and telehealth offerings, such as solutions for diabetes, hypertension, weight management, and behavioral health: Livongo's tie-up with continuous glucose monitor (CGM) developer Dexcom enables Dexcom users to remotely integrate their CGM data into Livongo's platform, and patients can leverage the DTx firm's myStrength mental healthcare app from home, for example. And solutions such as these are crucial to providing effective remote care amid the pandemic, as they can limit in-person interactions between clinicians and patients and potentially mitigate the further spread of the coronavirus in the process.

As payers increasingly lean on DTx tools to manage members' health amid the pandemic, we think it'll put a spotlight on the efficacy of DTx firms, priming them to secure additional payer tie-ups post-coronavirus. Massive healthcare network Kaiser Permanente recently offered its members free access to Livongo's myStrength mental healthcare app to better support their behavioral health needs as the coronavirus pandemic threatens to weigh on patients' mental health.

And as the coronavirus continues its spread, we expect to see payers increasingly develop new avenues through which their members can maintain their health amid the pandemic, including leaning on DTx. By leveraging DTx solutions during the pandemic, payers can cut down on their share of spending related to members' adverse health outcomes for chronic conditions: For example, Livongo's diabetes management program can help cut employers' spending by nearly $90 - with an ROI of up to $50 - per employee per month.

And as payers recognize the cost-savings these tie-ups can generate, we think DTx companies will be in prime position to secure partnerships with additional payers once the pandemic has subsided. Getting onto payers' benefits packages now could get DTx players' solutions into the hands of more members post-coronavirus. And if the Digital Therapeutics Alliance is successful in getting publicly funded insurance programs like Medicare and Medicaid to provide their members with access to DTx, this could have a massive impact on DTx uptake in the long-run considering the huge, unaddressed market members of government plans represent.

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