Last year, Miga Health, a virtual cardiovascular care company, told investors it wasn’t going to raise more money and would stop running a central part of its business, transitioning its thousands of patients.
But part of Miga will live on, one of the company’s founders told
Endpoints News
, through a somewhat unusual deal to sell some of its assets to a biotech company, Bitterroot Bio.
The health tech company’s moderate success, followed by its decision to wind down and sell instead, was described by co-founder and CEO Jarrad Aguirre, who built Miga with Andreas Limberopoulos, president, over three years.
In an interview, Aguirre shared the thinking behind the decision.
“What we didn’t want to do was get stuck in the in-between, and then look back over the last 10 years and say, ‘Did we knowingly elect not to take a big swing in heart health, because we felt obligated to continue building, even with the recognition that we weren’t going to get the job done?’” he said.
It’s a set of circumstances that other health tech startups that provide patient services are likely to face in coming years, if they aren’t already, following 2021 and 2022’s boom in venture funding that’s been followed by the current
pullback
.
And it raises the question, Aguirre said, of whether patient services can generate the returns those investors want in an environment where the cost of capital is much higher.
“There is a fundamental tension between building a healthcare services business that is meant to scale and meant to be inclusive, in one that fits the math of venture,” Aguirre said.
Aguirre and Limberopoulos started Miga in late 2021 and raised a $12 million seed round shortly after. The ambition was to build a platform that could serve millions of people, with the aim of “eliminating heart disease, as outlandish as that might be,” Aguirre said.
Through Miga, patients could get care for their heart health through virtual medical visits as well as visits with dietitians and health coaches.
By 2024, Miga had a virtual clinic running in more than 40 states with thousands of patients. The business, Aguirre said, was growing faster than ever when the company opted to explore a sale, with about a third of patients joining in the final months of Miga.
If you want to build a successful healthcare services business that reaches millions of people, taking insurance is an important part. But that’s not necessarily a high-margin business and is expensive to fund — potentially requiring hundreds of millions of dollars of investment to reach scale.
That, Aguirre realized, was going to be hard to do in a venture-created company.
“We just don’t believe that there will be companies like Miga that take insurance and get to the scale that we think is necessary,” Aguirre said.
Aguirre said transferring patients off of Miga’s platform was a “bittersweet” experience, but one it had to do going through an M&A process, even if Miga had sold to another care delivery company. But because Miga still had money, it was able to take its time, he said. (The digital health newsletter
Exits and Outcomes
and
Stat News
previously
reported
that Miga had stopped taking patients.)
“When we started Miga, the plan was to build forever, but the plan changed,” Aguirre said. “That’s OK.”
Going forward, Bitterroot Bio will take over the tech assets that Miga built. As part of the deal, which has closed, Limberopoulos is joining the biotech to head the technology strategy team. Aguirre plans to serve as a part-time advisor to Bitterroot, and is becoming the senior vice president of medical affairs for Lyell Immunopharma. The terms of the deal weren’t disclosed, and Bitterroot declined to comment.
Bitterroot is working to develop treatments for preventing secondary cardiac events for people who have had heart attacks or a stroke. It raised
a $145 million Series A
round in 2023, and has upcoming data on its Anti-CD47 therapy, BRB-002, that will be presented later this month.
Aguirre said he’s optimistic that putting Miga’s tech, which previously facilitated healthcare services through an app, inside a biotech could lead to new developments. It remains to be seen how Bitterroot plans to incorporate it into its research and development.
“
If you want to develop new medicines and fundamentally change paradigms, that’s going to happen with a team that looks different with technology embedded and within the company,” Aguirre said. “We don’t see that across companies right now.”
Aguirre is aware that not all founders would make the decisions he has.
“There are many paths to making change,” Aguirre said. “It would be very unusual if all the change we needed happened through VC-backed companies.”
He hopes sharing about Miga’s outcome might help other founders in a similar position. Questions like “Do I want to keep building this company and why?” can feel taboo, he said. But to him, it’s an important one, especially in an environment when many companies keep going long past the moment when it’s clear their plans won’t work out.
“I would argue that a form of quitting in plain sight is actually continuing to build,” he said. “Because you are knowingly spending more money, using your time, pushing the team ahead, likely with the foresight that it’s not going to achieve much to make healthcare better. And so we actually consider that a form of insidious quitting.”
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