Joe Kiani is showing no signs of slowing down despite the challenges he’s faced.
He described the past two years as “quite the ordeal.”
The medtech entrepreneur has been entangled in a proxy battle with activist investors and a lengthy legal dispute with tech giant Apple Inc.
“It’s been a big change, but I’m excited about my next chapter,” Kiani told the Business Journal.
Kiani founded Irvine-based Masimo Corp. out of his garage 36 years ago, which went public in 2007 and has since grown to a valuation of more than $9 billion. He was removed from the board last September and subsequently resigned as chief executive. Masimo last week named a new CEO.
Now, Kiani is looking to revolutionize diabetes care.
Kiani’s new venture Willow Laboratories, which he first teased on social media two months ago, focuses on metabolic health and has created an app designed to help people live a healthier lifestyle and prevent the progression of prediabetes to Type 2 Diabetes.
Willow, originally Masimo Laboratories then Cercacor Laboratories, was spun out of Masimo in 1998.
Cercacor owns certain license rights to many Masimo patents and has created hemoglobin, carbon monoxide and other monitors since its inception.
Cercacor officially began operating under the name of Willow Laboratories about a year ago.
Kiani is the majority owner and said the company’s just beginning sales right now.
Last November, Willow Laboratories entered an agreement with property owner Irvine Company to lease more than 60,000 square feet of space at University of California, Irvine’s Research Park office campus.
“We like collaborating with UC Irvine, so it’s good that we’re here,” Kiani said.
It’s the largest office lease of the fourth quarter in Orange County, according to a market report by Voit Real Estate Services. The second-largest lease was signed by Tarsus Pharmaceuticals for 59,626 square feet at the Spectrum Terrace office campus in Irvine.
In other news, Joe Biden flew from Washington, D.C. to Kiani’s 8,000-acre ranch in the Santa Ynez Valley following Donald Trump’s inauguration, according to multiple news reports.
Chapter Two
Kiani took to social media last November to hint at what was to come.
“In darkness, indeed I did see the stars; and amongst the many stars, shines bright Willow and Wine,” Kiani wrote in a LinkedIn post. “Stay tuned … I will continue to bring great things to the world!”
Kiani said that he became interested in diabetes about six months after starting Masimo.
He sees diabetes as a pressing issue with one in three American adults having prediabetes, but 80% aren’t even aware they have it.
“The people who have this disease don’t get to really live a good, easy life,” Kiani said. “They’re constantly managing their disease.”
Willow joins another Irvine-based company that’s tackling diabetes, Beta Bionics Inc. It received FDA approval last year for a product to utilize adaptive algorithms to learn each person’s unique and ever-changing insulin requirements to simplify diabetes management.
“We believe this marks a significant advancement over other insulin delivery technologies by offering a differentiated combination of improved glycemic control and a vastly simplified experience for users and caregivers,” Beta Bionics said in a SEC filing earlier this month, indicating it may go public this year.
Beta Bionics reported revenue of $44.7 million for the nine months that ended Sept. 30.
Nudge Diabetes Users
For many years, Kiani said he couldn’t come up with a non-invasive way to measure glucose until now.
Willow Laboratories’ app is called Nutu, which is Latin for “nudge.”
Users log their food, exercise and sleep in the app, which calculates a daily score with the aim of achieving an ideal score of zero.
Based on one’s score, the app makes personalized suggestions such as adjusting portion sizes, removing ingredients or taking a walk.
“It’s not just counting calories,” Kiani said.
Nutu offers two programs: diabetes prevention and healthy living, with a digital AI coach that’s available to answer questions 24/7.
It’s currently available in English and Spanish for Apple and Android devices. There are currently two plans available starting at $9.99 up to $49.99 per month.
The company will soon release a second generation of the app with features Kiani said he’s been waiting to introduce.
“Some of the early users that have been giving us feedback are saying really positive things about what it’s done for them,” he said.
Using Nutu for 12 months is said to reduce the risk of developing T2D by 58% in adults at high risk for the disease, according to the company.
Willow Laboratories owns 127 issued patents, 48 pending patents and technologies used by hospitals licensed under Masimo Rainbow Signal Extraction Technology, according to its website.
Some analysts expressed doubt as to whether the new company could secure licensing rights for the technology.
“We don’t think Kiani has the ability to terminate or voluntarily exit the licensing agreement that exists between MASI and Willow covering Rainbow sensors,” Piper Sandler analysts Jason Bednar and Joseph Downing wrote in a note to investors.
Kiani said he hopes to accomplish some of the things he tried to do at Masimo with consumer health.
Masimo in 2022 spent $1 billion to acquire Carlsbad’s Sound United, an audio equipment maker, to expand into consumer devices.
That acquisition wasn’t well received by investors, which sent Masimo’s shares tumbling; the company’s market value fell $5.2 billion in one day.
“I believe you’ve got to do your best to make things better for the world, and that’s what I’m trying to do with Willow,” Kiani said.
He said he plans on avoiding the same mistakes he made in the past, including “giving up control of the future of [his] company to people [he] doesn’t know.”
Expects to Have 400 Employees
Willow Laboratories has about 80 people at its new space in Irvine and expects to grow to 300 or 400 employees, according to Kiani.
“We’re going to scale this thing up,” he said.
Everything from manufacturing to research and development will take place at the new facility.
Kiani said that he didn’t bring over any employees from Masimo, but said “a lot” have recently applied to open positions.
At press time, there are five job listings on the company’s website for roles in engineering, design and marketing and sales.
Closing Arguments Scheduled for Next Month
Kiani also gave an update on Masimo’s ongoing patent infringement trial with Apple.
The bench trial, which began on Nov. 5, is a trade secret case over pulse oximetry technology used in smart watches. Judge James Selna, who oversaw last year’s jury trial, will decide whether Apple poached Masimo’s employees and stole trade secrets to develop the Apple Watch.
Closing arguments are set to take place at the beginning of February, Kiani said.
Masimo is being represented by its longtime attorneys, Joseph Re and Steve Jensen of Knobbe Martens.
“The team at Knobbe does a great job of making sure the truth gets out,” Kiani said. “I think, once again, they did that and I’m hopeful that we’ll get the right result.”