Diabetes Startup Virta Health Is Now Prescribing Ozempic For Weight Loss In A Push Toward Profitability And Ipo

Virta Health takes a nutrition-first approach to reverse type 2 diabetes and prediabetes and occasionally prescribes medications alongside its program.

Virta Health

• Virta Health is now prescribing GLP-1s to treat obesity alongside its diabetes-reversal program.
• Virta says it's doing $100 million in annual recurring revenue and seeing its growth accelerate.
• Its CEO says the startup aims to hit profitability by the end of 2025 ahead of a potential IPO.

Virta Health has prescribed GLP-1 medications like Ozempic for diabetes since the startup began caring for patients in 2016. Now, it wants to prescribe the buzzy drugs to treat obesity, too.

Virta made a name for itself in virtual diabetes care with its rigorous nutrition plans. The program aims to help patients reverse type 2 diabetes largely through personalized low-carb diets. The startup began treating prediabetes and obesity in 2020.

While GLP-1 medications were originally developed to treat diabetes, the drugs have exploded for their weight-loss potential. However, previous clinical research has shown that patients gain back most of the weight lost with a GLP-1 when they stop taking the medication. That's a big problem for employers, who don't want to pay for the expensive drugs indefinitely.

Virta now is positioning itself as a "responsible prescriber" for employers who want to manage the costs of covering those medications for their employees by pairing the prescriptions with nutrition support. The company says it can help patients lose the weight and keep it off — Virta released a study in February 2024 showing its program can help diabetes patients maintain their weight loss after they stop taking GLP-1s.

Virta's expanded weight-loss program could be the last push the startup needs to get to profitability — and maybe even an IPO.

The company is now bringing in more than $100 million in annual recurring revenue, a 60% year-over-year increase, CEO Sami Inkinen told Business Insider. Virta expects even faster growth in 2025 as its weight-loss business accelerates.

Inkinen said Virta will be profitable by the end of 2025.

"An IPO is the next milestone for us," he said. He declined to provide details on Virta's planned timeline for a public market debut but suggested that the company wants to be profitable before it tests the IPO waters.

Virta's biggest competitor, Omada Health, is using a similar strategy as the diabetes startup approaches an IPO. BI reported in October that Omada Health had filed its S-1 this summer; CEO Sean Duffy told BI later that month that Omada's obesity care program had become the entry point for most of its new customers.

Virta Health

Digital health's weight-loss frenzy

Virta and Omada's expansion into obesity care is one of many channels of the surging market for weight loss solutions, as consumers rush to get their hands on GLP-1s like Ozempic and Wegovy.

Telehealth businesses like venture-backed Ro went big on new offerings to provide virtual weight-loss care alongside prescriptions. WW International, more commonly known as WeightWatchers, switched up its diet-centric approach in 2023 by acquiring digital health platform Sequence to offer GLP-1 medications to its customers. Ro's public competitor, Hims and Hers, bought a compounding pharmacy in September largely to prescribe knock-off versions of weight loss drugs like Ozempic while those medications are in shortage.

Inkinen emphasized that Virta has no financial reason to prescribe GLP-1s.

"We are not an online pill mill. We don't make money from the drugs, and we are not incentivized to prescribe drugs to make money," he said.

As the market has gotten more competitive, Inkinen said employers and health plans have increasingly honed their strategies for GLP-1 coverage. Previously, he said, employers either covered the drugs with few caveats or blocked payments for the medications altogether. Now, they're beginning to meet in the middle.

"You have to have a holistic approach, where you say, these drugs are a useful tool in the toolkit for some people, but you also have to have a nutrition-first approach, and prescribe any drugs in a responsible manner," he said.

Most of Virta's patients aren't on GLP-1s today. Inkinen said about 30% of their incoming type 2 diabetes patients are taking GLP-1s when they begin Virta's program. He added that most of those patients can safely stop taking the drugs within the first year of Virta's diabetes-reversal program.

The startup said it plans to hire rapidly to meet increasing demand for its weight-loss offering, including by more than doubling the number of health coaches and medical providers on staff.