How to untap the potential of the global sleep disorder market of 1bn people. – Interview with Gilad Glick, CEO and President of Itamar-Medical about their go to market strategy.

Today, almost 1 billion people suffer from sleep related breathing disorders. 80% of people with sleep apnea have never been diagnosed. This alone can lead to other serious life-threatening chronic conditions. Together with Gilad Glick, CEO & President of Itamar-Medical, we explore the large untapped undiagnosed home testing market opportunity, the COVID-19 effect on the traditional sleep testing pathways, the company’s business model and trends that shape the space.

One in four adults is estimated to suffer from a sleep disorder, including sleep apnea. Consequences of poor sleep are associated with health issues like depression, diabetes, cardiovascular disease, and obesity. 80% of sleep disorder cases are undiagnosed. COVID-19 has disrupted the traditional sleep apnea testing, diagnosis and therapy and has created a large demand for disposable and infection-free home sleep apnea tests and remote patient therapies.

We talked to Gilad Glick, CEO & President of Itamar Medical, about how their first and only fully disposable home sleep apnea test on the market has reshaped the sleep disorder industry, how can sleep play a key role in DTx programmes, as well as what is the real value of Apple and other tech companies that have entered the sleep market.

Enjoy the interview!

Research2Guidance: Can you share with us Itamar-Medical’s story and product offering
Gilad Glick: Itamar-Medical is a medical device and digital health company focused on the development and commercialization of non-invasive medical devices to aid in the diagnosis of respiratory sleep disorders and leading the integration of sleep apnea management into the cardiac patient care pathway. We have over 250 employees in offices in both Israel and the USA, and our market cap is roughly US$300M.

Our core product is called WatchPAT®, an FDA cleared home based diagnostic device that uses innovative technologies, namely our proprietary PAT® (Peripheral Arterial Tonometry) technology, in conjunction with a sophisticated algorithm that analyses 7 signals to ensure the accurate detection of sleep apnea. Recently, we launched the first and only fully disposable and cloud based HSAT device which uses a simple smartphone app to easily transmit the patients sleep data to our cloud platform for analysis. Within just one night, provided the patient has slept minimum of 4 hours, a diagnosis can be made from the comfort of their own bed. We believe this is the future of sleep medicine.
Our medical devices are available worldwide – US, Europe, Asia, Israel and many other countries.

Why this matter!
Today, it is estimated that one in four adults suffers from sleep apnea and 80% of people with sleep apnea have never been diagnosed. It is our mission to change that!

Sleep apnea is a serious disease and is something that a person has no control over. People with sleep apnea can go to bed sleep 9 hours and still wake up tired, because he/she is unconsciously waking up every 1-3 minutes throughout the entire night. If left untreated, this condition can lead to other serious and life-threatening chronic conditions. For example, there is a proven link between sleep disorders and heart disease, with approximately 60% of cardiovascular patients also suffering from sleep apnea.

Research2Guidance: What is the company’s business model, strategy, market share?
Gilad Glick: Our business model is B2B.

Because WatchPAT is used to diagnose a disorder, it requires a prescription. Our direct sales force is selling to hospitals and physicians, clinics and to other similar stake holders. Sleep doctors, heart disease specialists, and family doctors can use our product to make diagnoses and help their patients get better with the right therapy. In the US, in the home sleep apnea diagnostics industry, our market share was roughly 22% before COVID-19. During the pandemic, because of our unique, fully disposable device that promotes infection control, our market share has increased dramatically. Just to give you an idea, Pre-COVID volumes were 70% in-lab and 30% home sleep apnea testing (HSAT), according to EnsoData’s survey, during the pandemic the data shows that the in-lab to home testing ratio flipped.

Research2Guidance: What was Itamar-Medical’s role in the space? Who are your competitors?
Gilad Glick: I would say we lead the space. We invented the category and paved the way when it comes to home testing, reimbursement, and everything that goes along with it.

Soon, other players entered the market, including large manufacturers like ResMed and Philips, who focus on the sleep apnea therapeutics space. Their offerings are simple and cheaper home sleep tests. Their motivation is to diagnose as many patients as possible in order to sell their therapeutic devices.

Our focus, however, is on quality. Our positioning is a high-end device, more expensive with a comprehensive capabilities and easy-to-use design.

Research2Guidance: What is the price of your medical device?
Gilad Glick: The catalogue price of our fully disposable WatchPAT ONE device is $99 US. The end price is mostly driven by the reimbursement. The device is very broadly covered in the US within hundreds of different health plans. In the UK we are covered by the NHS; in Holland we are covered by the National Program, as well as in Japan, etc. I would say on a global level the product is covered by health insurers, which at the end of the day is important to patients. Of course, the reimbursement level in every country is different, as such, our pricing at each country is driven by the reimbursement level.

Research2Guidance: What are the trends in the sleep space? How have expectations of home sleep testing changed during the last 5 years?
Gilad Glick: The awareness of the importance and health implications of sleep has increased dramatically over the last 5 years within the consumer space. This was driven to a large extent by wearable devices and smart watches like the Apple watch, Galaxy watch, Fitbits, Garmin, and so on, as well as many other smartphone app that started monitoring sleep and heart rate.

In the medical community there was also a very important realization. Up until 5 years ago, sleep apnea and other respiratory sleep disorders were perceived as lifestyle issues. Today, we know it is a serious and often life-threatening condition. Sleep apnea can drive cardiovascular disease, cognitive disease, and others. At present, most general doctors, but also cardiologists, understand that sleep apnea is an independent cardiovascular risk factor just like cholesterol.

I think we are witnessing an at home digital health revolution. People are ready for and more accepting of taking medical exams/tests at home in order to avoid hospital and clinic visits, they are open to having caregivers guide them in setting up medical devices, and receiving consultations in the comfort of their own homes. This revolution is enabling an unbelievable new level of care and we are very happy to be part of it.

Research2Guidance: Can sleep play a key module in DTx programs? (as part of an overall Chronic Condition Management)
Gilad Glick: Yes! Sleep apnea is no longer a lifestyle condition, but a serious risk factor for people living with a chronic condition. Based on that, DTx programs that are designed for chronic disease management; helping patients with diabetes, hypertension, etc., should include sleep as one of the key pillars to managing the condition.

Sleep is seen as the third important module in balancing the health of chronic disease patients, alongside exercise and nutrition.

R2G: Do you partner with other ecosystem companies?
Gilad Glick: Absolutely. We have a number of very interesting partnerships established, and we even collaborate technologically with a partner in the space.

For example, within the “home testing” space we compete with Philips and ResMed, but when it comes to therapeutics, we are collaborators. Because we want to provide doctors with a dashboard, we have integrated our clouds together.

Another, great example is our partnership in the US, with BetterNight. We are the leaders in HSAT diagnosis, and they are leaders in the therapy space. They are fantastic at setting up and guiding patients with at home therapy. They have a highly sophisticated AI algorithm to monitor patients for any variations that are important, and human care coordinated calls guide the patients adhere to the therapy. Our cloud platform is integrated with BetterNights and the whole process and pathway is seamless for the patient.

Research2Guidance: Based on your experience, what are the key factors for partnerships to be successful?
Gilad Glick: In our case, I believe the most important thing is to be able to digitally integrate the entire care pathway, so the patient receives one seamless solution. Depending on the complexity of a patient’s condition, this could include 5-8 key points of contact, but they should be so integrated the patient does not see a difference. At the end of the day, what is important is that people receive a single high quality and easy to use solution that addresses their needs.

Research2Guidance: There seems to be an increased emphasis on fast screening to therapy timelines, with companies such as Itamar-Medical contributing to “streamline care”. Can you elaborate?
Gilad Glick: In the traditional care pathway, it took months for a person to get tested for sleep apnea. Reasons being that a sleep doctor/specialist serves as a patient’s first point of contact, the patient then needs to wait for a bed to free up in a hospital/sleep-lab for the test to take place, and only then can treatment be given, which also typically requires a significant waiting period. Due to this elaborate process and the excessive wait times, patients become distracted with other life requirements and responsibilities, sidelining their pursuit of diagnosis and treatment, leading them to go undiagnosed and/or untreated for their sleep apnea.

However, at home testing solutions, like ours, that are made readily available, can be shipped to a patient’s home within a day, and produce an accurate sleep apnea diagnosis within just one night, offer a significantly more convenient and accessible alternative, fast tracking the patient care pathway. However, we don’t stop here. Knowing that the time between diagnosis and therapy is also key, as the longer the delay between them the less compliant patients are to treatment, Itamar-Medical focuses on the entire patient care pathway. We have recognized that in order to improve the times between the initial doctor’s visit, diagnosis and the initiation of therapy, digital platforms and home-based solutions are key.

Research2Guidance: Recent AASM COVID-19 Mitigation strategies have called on providers to prefer fully disposable HSAT if possible. How does this impact Itamar’s business?
Gilad Glick: Very positive impact – we are the only company that offers a fully disposable sleep apnea home tests. In fact, the demand has grown so large that we are working hard to make our devices fast enough

We developed an intuitive and less intrusive watch-like device with no screen, no buttons, and no connectors. The device uses Bluetooth to connect to a simple smartphone app. This enables the users’ phone to act as the devices screen with all the necessary buttons, connectors, etc. functioning independently of the device and allowing us to simplify the design and make the device fully disposable.

We have been able to significantly shrink the screening process down from 3 to 4 months into a 2 week cycle, with our digital health platform and community of eco system partners, which is a dramatic improvement from testing to diagnosis to treatment for sleep apnea.

When COVID-19 hit, our disposable solution became the ultimate solution to safely and accurately diagnose sleep apnea remotely, promoting infection control. With our digital platform and partnerships, we offer a full solution from Dx to Tx.

Research2Guidance: Looking at disease geography, where do you see home sleep testing expanding in other domains in the future?
Gilad Glick: Today, 70% of our revenue is generated in the US. Although geographically we are present in other countries too, for us the US market is a large homogeneous market; the reimbursement levels are adequate and there is no language barrier, and the market opportunity is significant as well.

There is also a very limited number of sleep doctors/specialists in the world, specifically, in the US there are only 5,000 sleep doctors, the historical pathway getting a patient to a sleep doctor has failed. This is one of the key reasons why 80% of people with sleep apnea across the world are undiagnosed.

Our key strategy and mission at Itamar-Medical is to make home sleep apnea tests widely available. Thus, in the US we have decided to work not only with sleep doctors, but with cardiologists as well.

Research2Guidance: Final question, what is your take on reemerging Apps and Wearables, including recent news about Apple, that report sleep related indices. Do we see a D2C trend raising?
Gilad Glick: A lot of market players are talking about sleep and we have seen Apple’s attempt to enter the market. Yet, neither they nor other companies are attempting to offer a medical device, as it is not easy to create one. Medical devices cannot be reconfigured, must be approved by regulatory bodies and display clinical proof, innovation is not rapid, and regulation is rigid.

For me, the value of Apple, and other tech companies who have entered the sleep market, is in creating increased general awareness of the problem and the importance of adequate sleep. At Itamar-Medical we called this “screening” and view wearables as great screening devices. They are good at showing a person that there may be a problem with their sleep, but they cannot diagnose. Thus, for players like us in the space, wearables have served as fabulous funnel creation, increasing awareness of the importance and value of our solutions. But ultimately, they cannot and will not replace the need for our products.

Research2Guidance: Gilad, thank you very much for your thoughts and insights.

ABOUT Itamar-Medical

Itamar Medical is a medical technology and digital health company focused on the development and commercialization of non-invasive medical devices to aid in the diagnosis of respiratory sleep disorders. Itamar Medical commercializes a digital healthcare platform to facilitate the continuum of care for effective sleep apnea management with a focus on the core sleep, cardiology and direct to consumer markets. Itamar Medical offers a Total Sleep Solution to help physicians provide comprehensive sleep apnea management in a variety of clinical environments to optimize patient care and reduce healthcare system costs. Itamar Medical is a public company traded on the Nasdaq and on the Tel Aviv Stock Exchange, and is based in Caesarea, Israel with U.S. headquarters based in Atlanta, GA. For additional information visit www.itamar-medical.com.

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