Digital metabolic health company Calibrate tapped Rob MacNaughton, a healthcare technology executive, as its new CEO as it pivots to grow its enterprise business.
MacNaughton's track record includes serving as CEO of Curve Health and Nurse Grid and as chief product officer at Cambia Health Solutions, a multistate Blue Cross Blue Shield payer.
Prior to joining Calibrate, he served as the venture chair at Redesign Health where he oversaw the launch and growth of several care delivery and health technology brands.
Calibrate founder and former CEO Isabelle Kenyon stepped down from her position last fall.
In an exclusive interview, MacNaughton said jumping on board at Calibrate marked a "once-in-a-career opportunity."
"We are poised to win, just given our position as a pioneer and a leader in the space. No other company has the data that we have that illustrates and proves the impact that GLP-1 drugs can have in concert with lifestyle intervention and coaching," he said. "I can honestly think of no other opportunity in healthcare where there's the potential benefit to meaningfully impact people's lives and ideally lower the total cost of care."
GLP-1 medications were one of the hottest topics in healthcare in 2023, and interest in weight loss medications is only expected to increase.
Weight loss telehealth platform Calibrate launched in 2019 before new trendy new GLP-1 drugs entered the market. The value-based obesity treatment company offers a digital program that combines medication, including GLP-1 drugs, with behavior change delivered through a proprietary intensive lifestyle intervention to treat the underlying biology that contributes to obesity.
The company has been rapidly downsizing its consumer business to focus on employers.
Thursday, Calibrate publicly announced a strategic collaboration with pharmacy benefit manager OptumRx, part of UnitedHealth Group's Optum, to provide its weight loss programs to employers.
In August, Calibrate launched with FedEx as a strategic client through its OptumRx partnership, which sets the stage for more employer deals. The deal with FedEx had previously been reported by Business Insider.
"OptumRx has long-standing relationships with thousands of employers, and if those employers are interested in covering the weight and obesity management benefit, we're the strategic partner in that. From a go-to-market standpoint on the enterprise side, it's a fundamental game changer for us," MacNaughton said.
He added, "We have signed some very large clients as well as a few other employers. We are gaining tremendous traction in the space."
The company also received a funding boost from Madryn Asset Management, which now owns a majority stake in the company. The amount of the funding deal was not disclosed.
The cash will be used to fund Calibrate's growth and scale, MacNaughton said.
"We've made strong investments in the enterprise side of things to underscore our relationship and strategic partnership with OptumRx. We anticipate being able to serve hundreds of thousands if not millions of people, so the capital is going to be used to fund these growth efforts," he said.
The company has raised $160 million since its launch in 2019, including a $100 million series B round in 2021.
It was disclosed in a Securities and Exchange Commission filing last fall that Madryn invested $29 million in Calibate as part of a restructuring deal. Madryn committed the additional financing as part of a broader restructuring that saw it assume control of the business. It wasn't clear in the filing how much of an ownership stake the new funding represented.
The startup faced serious challenges in the past two years, as reported by Business Insider, Fortune and others. The company laid off workers and struggled to meet customer demand due to shortages leading to a high number of refunds before Kenyon stepped down from her position as CEO.
"As a pioneer, there's been a lot of lessons learned over the last several years. That being said, I think this puts us in a position of strength," MacNaughton said. "Again, the data that we have and that we publish, we believe is not only good for Calibrate, but good for the sector as well. I think that positions us for continued growth and leadership in the enterprise space."
He added, "As you work with employers and PBM, there's a higher level of research and data necessary, and we want to be on the vanguard of that."
Last fall, the Food and Drug Administration approved Zepbound, a new weight loss drug from drugmaker Eli Lilly. It's the latest entrant into the field of new drugs that already includes Novo Nordisk's Ozempic and Wegovy and Lilly's Mounjaro. The addition of Zepbound should help with drug supply, MacNaughton said.
"Supply is getting better as I think manufacturers are seeing and preparing better for the demand that has been generated. Things are only going to get better, and things have improved a lot in the last 16 months as well," he noted.
Last month, Calibrate released data based on 16,000 members that demonstrated strong results for its virtual obesity treatment. The program resulted in 16% average weight loss at 12 months and 18% average weight loss at two years, coupled with 78% of members with diabetes or prediabetes reaching normal hemoglobin A1c levels within 12 months.
Calibrate also says it's the only commercial program to present data showing results after members are tapered off GLP-1 medications. The report, released in January, shows that among members who discontinued GLP-1, 92% maintained a clinically significant 10% weight loss at least six months post-tapering.
"I've been in healthcare for a couple of decades now, and there's few points of light that I see that have the impact that the solutions that we bring to the table can truly have," MacNaughton said. "We recently announced our our third-year results that show that after two years, our members on average lose close to 18% of their body weight. The impact that has on other conditions, whether it's diabetes or prediabetes, those are truly meaningful impacts."
He added, "GLP-1s have gotten a tremendous amount of airtime, and they have engaged the U.S. healthcare consumer in ways that few things have. But what our longitudinal data shows is that GLP-1 drugs are an important part but the long-term, meaningful advantages only come to the fore when combined with coaching and lifestyle intervention. At Calibrate, that's what our solution and program does: It dovetails those together."
According to Calibrate's website, it has served 30,000 members.
The company's focus on the enterprise market comes as employers are increasingly focused on addressing obesity and chronic conditions among their workforce.
Obesity has nearly tripled worldwide since 1975, and about 42% of U.S. adults are estimated to live with obesity, according to Centers for Disease Control and Prevention data. The toll is physical and financial, with the medical cost of obesity hitting nearly $173 billion in 2019 in the U.S.
Analysts project that the global obesity therapeutic market could be worth $100 billion by around 2030, and Barclays estimates the burgeoning weight loss drug industry could reach as high as $200 billion within the next decade.
Employers are seeing surging demand from their workers for benefits that cover obesity treatment and are challenged with finding the right approach.
"Employers are incredibly intrigued by this. There have been few things that have shown the promise of such meaningful impact, and, frankly, suggestive that there might be a total cost of care component as well, although the data is still yet to be proved out," MacNaughton said. "Given the significant impact that it has on weight loss and other key metabolic metrics, it's certainly increasing the amount of attention and demand from the enterprise space. These drugs can be costly, so how best you manage to thread that needle between significant healthcare outcomes and the costs associated with it, and that's where we believe our solution is going to drive value. We ensure that it's the right members on the right drug at the right time, and it's helping employers manage that process to ensure that they're getting maximum impact for their healthcare dollar investment."
The virtual weight loss market has become competitive with healthcare players like Teladoc, Found, Ro, Hims & Hers, Everly Health, Form Health and Transcarent all jumping into the space. WeightWatchers launched a telehealth clinic to prescribe weight loss drugs, building on its acquisition of digital health company Sequence last year.
MacNaughton contends that Calibrate will continue to stand out in a crowded market.
"The headlines are out there about the impact these drugs have. It's now how best you balance the strategic imperative of that along with the cost side of things. We have the experience of providing solutions to jumbo employers. Very few, if any, other companies have that experience," he said. "We have the confidence that we will continue to lead and thrive as the market continues to expand. Ultimately, competition is good. This market is huge. We believe where we're best poised to deliver those solutions."