Shares of smartband and smartwatch maker Fitbit (FIT) are higher after the company announced it is expanding its strategic partnership with Humana (HUM) to drive healthy habits and manage chronic disease.

STRATEGIC PARTNERSHIP EXPANSION: On Wednesday, Fitbit and Humana announced that they are expanding their partnership to help members adopt and implement healthy behaviors to help prevent and manage chronic conditions. Humana has selected Fitbit Care as a preferred health coaching solution for Humana's employer group segment and through this partnership, over five million Humana members will have the potential to access Fitbit wellness solutions or health coaching. Fitbit Care is a connected health platform, launched today, that combines health coaching and virtual care, Fitbit's wearable devices and self-tracking and personalized digital interventions. The Fitbit Care health coaching solution has coaches working with participants to create personalized care plans and connecting with members through multiple channels that include in-app communications, phone and in-person meetings. Users who already have health coaches can connect with them through the platform or they can opt for "a fully wrapped solution" where the company provides the technology and wellness advice. Fitbit and Humana also announced the availability of the Humana Go365 clock face on Fitbit Versa and Fitbit Ionic devices, making members' Go365 activity data accessible right from the wrist.

EXECUTIVE COMMENTARY: "Working with Fitbit, we have been able to provide our members with wearable devices, data and insights they can use to achieve their best health and wellness. By adding Fitbit Care's new health coaching capabilities, we can offer even more personalized, meaningful support to our members who are focused on specific health goals, such as smoking cessation or weight loss, or the management or prevention of chronic conditions", said Jeff Reid, Humana's senior vice president of Wellness Solutions. "Fitbit's intuitive technology and human coaches are powerful tools to engage and motivate members, creating more frequent, convenient touch-points that support our members beyond the walls of a doctor's office". Adam Pelligrini, general manager of Fitbit Health Solutions, said, "We're already seeing proof points that the solutions we're building are taking hold and are resonating with our health plan and employer customers." Pelligrini added Fitbit already works with over 100 health plans and its health solutions business unit currently represents less than 10% of the company's overall revenue.

WHAT'S NOTABLE: Shares of Fitbit fell on September 12 after Apple (AAPL) unveiled its new Watch Series 4 at its product event. The device features a larger display, new user interface, digital crown with haptics, faster performance, louder speaker and electrical heart sensor with electrocardiogram app and an optical heart sensor. In addition, the company said it received Food and Drug Administration approval for the built-in ECG scanner and it is the first over-the-counter ECG product. Following the fall, Morgan Stanley analyst Yuuji Anderson told investors that he believes the drop "rightly reflects" concerns over the pace of software and sensor improvements at Fitbit. However, the analyst added that he is more concerned that the functionalities of Fitbit's Versa and Charge 3 are not sufficiently differentiated to avoid cannibalization and their aggregate demand will not sufficiently offset legacy product declines.

'SIGNIFICANT EVOLUTION:' Craig-Hallum analyst Alex Fuhrman called Fitbit's Fitbit Care launch a "significant evolution" in the company's strategy to add value as a healthcare partner and to increase its recurring revenues. He also views the concurrent Humana (HUM ) partnership announcement as evidence of the strong market demand for companies and healthcare providers to partner with Fitbit and integrate its data into users' other care plans.

PRICE ACTION: Fitbit is up 2.1% to $5.92 in morning trading.