Starting with Ozempic and Wegovy, this tech startup recently raised $20 million to tackle weight loss with data.

Weight loss has always been big business, but it has grown of late due to demand for Ozempic, Wegovy and other new diabetes and obesity drugs.

In the first half of 2023, sales of Ozempic and Wegovy increased by 58% and 363%, respectively. This comes after quarterly prescriptions for a type of GLP-1 treatment that mimics a hormone in the gut that suppresses a person's appetite rose 300% between the start of 2020 and the end of last year.

But as consumers and businesses pour more money and resources into tackling the obesity epidemic, which is costing the U.S. more than $170 billion During the year, drug developers are not alone in finding innovative solutions.

Signos, a five-year-old startup, takes a pill-free approach.

The company uses continuous glucose monitors, or CGMs, and provides real-time diet and exercise recommendations based on an individual's questions. CGMs are small sensors worn on the arm that monitor glucose levels, primarily for people with diabetes. The information is sent wirelessly to the smartphone, which allows the user to better avoid emergency situations.

Signos uses CGMs that are built Dexcom. The startup has its own app that shows users how their body reacts to specific foods, what causes glucose spikes, and when to exercise for best weight loss results.

On Tuesday, Signos said it closed a $20 million funding round led by Cheyenne Ventures and GV, formerly known as. Google Enterprises. Dexcom Ventures also contributed to the funding. Signos said it will use the new capital to continue research into metabolic health and expand its team, which currently numbers about 45 people.

“Whether you have five pounds to lose or 100, we want to make sure we can help everyone,” Sharam Fuladgar-Mercer, Signos co-founder and CEO, told CNBC in an interview.

Users who sign up for Signos can choose One-month, three-month or six-month plan. With the half-year plan, customers pay $143 per month, which covers all the expensive CGMs they'll need during that time. The company declined to share specific details about how many people are currently using its platform.

According to Fouladgar-Mercer, the long timelines are designed to attract customers who are serious about their weight loss journey. In addition, the sensors themselves have a long wear time. Dexcom G6 and G7, the latest devices, can measure glucose for up to 10 days. Signos currently supports the G6 and will soon work with the G7 as well.

Fuladgar-Mercer said Signos is using Dexcom's CGM as part of a clinical trial that has been approved Institutional Review Board Designated by the US Food and Drug Administration to monitor biomedical research involving real human subjects.

Fouladgar-Mercer said she started the company in 2018 in part because she wants to manage her weight throughout her life. He trained as an athlete and played hockey in college, but he said he noticed how food often affected him differently than his teammates.

He said he always felt that a “critical component” to understanding an individual's metabolism was missing, and it had bothered him for 30 years.

Signos helps users understand how to make the right decision in the moment, but they can “go behind the scenes” and learn as much about the science as they want, Fuladgar-Mercer said. Users can also integrate sleep, heart rate and exercise data Apple Watch to personalize their profile even more.

“Once they trust how the system works and understand the methodology, they can just follow very quickly, here's what I'm doing, here's what I'm doing, here's what I'm doing,” Fuladgar-Mercer said. “And that's how you get behavior change.”

While Dexcom primarily develops its CGMs for diabetes patients, the company is also working on broader applications. For example, next year it will release a new one product Intended for people who do not take insulin. similarly, Abbott Laboratorieswhich dominates the global CGM market, hopes to bring its first consumer CGM, called Lingo, to the United States next year, adding personalized coaching with recommendations on diet, sleep and exercise.

Fuladgar-Mercer said Signos has more data than “anyone in the world for non-diabetics.” He added that since the company launched its first product nearly five years ago, it has been able to focus on refining its technology.

“I don't want to set the expectation the wrong way,” Fuladgar-Mercer said. “A lot of times I think, ‘Oh, I lost X pounds in X days.' That's not what we're trying to achieve. It's really, how do you put us on a sustainable journey? And that journey isn't going to happen in two or three days.”

According to Fouladgar-Mercer, Signos can work well with Ozempic and Wegovy Novo Nordisk and other GLP-1 treatments. Novo Nordisk's share price has quadrupled since 2018, and the company is now the most valuable in Europe.

Fouladgar-Mercer said GLP-1 drugs are a “powerful tool” that can help people start losing weight, but weight loss can be difficult if they stop taking the medication. Platforms like Signos can promote and sustain healthy lifestyles over time, he said.

Ultimately, he said, he wants people to use Signos to learn to make better choices that work best for their bodies.

Signos, according to Fouladgar-Mercer, can use technology and data to “drive behavior change and then package it all into a system that's really focused on managing and solving this biggest problem in America, which is weight.”

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