Omada Health (OMDA) has become the second major digital health company to debut on the public markets this year, with an initial public offering valued at $1.1 billion.
The company follows a successful launch of Hinge Health (HNGE) last month, which plays in one of the same markets as Omada — musculoskeletal health guidance. But Omada is better known as a clinical health guidance company for multiple chronic diseases, with an emphasis lately on weight loss management.
Omada began trading at $23 per share on the Nasdaq on Friday. By midday, Omada stock traded as high as $27 per share, up 43% since the first trade. The IPO was initially priced at $19 per share.
The digital health platform has found its footing in the weight management space, though not by offering popular GLP-1 treatments. The company doesn’t plan on doing so in the future either, CEO Sean Duffy told Yahoo Finance.
Duffy said that’s one reason why “the capital markets have, in many ways, asked us to come in” to the public markets.
The company has differentiated itself and avoided the pitfalls of an ever-changing GLP-1 market, which was plagued early on by shortages and then disruption after the FDA removed GLP-1s from its shortage list, ending access to copycats of the popular drugs.
Omada provides clinical guidance to patients once they leave their doctor’s office. It’s a concept Duffy and his co-founders realized was needed more than a decade ago, in 2011, when the weight loss market and technology were very different.
When asked if Duffy regretted not going public during the pandemic when digital health was experiencing an investment boom, he said no, because the company had only begun expanding beyond diabetes into other care areas, including weight loss.
“When you’re becoming a public company, you want to make sure to have your proof points out there,” Duffy said. “In retrospect, it was a great decision.”
But Omada does have the pandemic to thank for its growth, as it put a spotlight on digital health services. The company has grown its user base through partnerships with large companies that offer the services to employees. In addition, Omada is partnered with pharmacy benefit managers, including CVS (CVS) and Cigna (CI) — the latter of which is also an early investor through its ventures arm.
Omada began its journey by serving the needs of diabetics, including a partnership with Abbott (ABT) and users of its Freestyle Libre continuous glucose monitoring (CGM) devices. It has since expanded to the GLP-1 market by providing the same guidance services, including meal kits and lifestyle change advice, to patients.
Still, the company has yet to turn a profit in its 14-year existence. Duffy said the company’s losses are decreasing over time, and revenue continues to grow year over year.
“We have a history of net losses, due in part to the significant investments we have made in the design and development of our programs and platform enhancements, and have not yet achieved profitability on an annual basis,” the company said in its S-1 filing.
The company stated it incurred net losses of $67.5 million and $47.1 million in 2023 and 2024, respectively. In the first quarter ended March 31 of this year, Omada lost $9.4 million compared to a $19 million loss in the same period a year prior.
“We incurred net losses of $67.5 million and $47.1 million for the years ended December 31, 2023 and 2024, respectively, and $19.0 million and $9.4 million for the three months ended March 31, 2024 and 2025, respectively.”
Duffy said he hopes new investors can help guide the company to become a leading platform addressing chronic disease.
“It’s just a neat moment in time, where the new shareholders that are coming in can help me, and help us, imagine a path … to bend the curve of disease,” he said.
Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. That includes GLP-1s, of course. Follow Anjalee as AnjKhem on social media platforms X, LinkedIn, and Bluesky @AnjKhem.
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