1. MEDTECHSTRATEGIST.COM
See page 7
MARCH 16, 2016
Vol.3, No.4
MARKET TRACK
Fastest Growing Categories in Connected Health
Published twice monthly by Innovation In Medtech,llc
EXECUTIVE INTERVIEW
Dealmaker Anthony Viscogliosi Discusses
Orthopedics’ Changing
Business Models
Wendy Diller, 26
TECHNOLOGY TRENDS
HIMSS Survey Data Reveals
Growing Provider Reliance on
Connected Health Tools
Mary Thompson, 21
START-UPS TO WATCH
CARTIHEAL:
Regenerating True Hyaline Cartilage
Tracy Neilssien, 38
LABSTYLE
INNOVATIONS:
A Simple, Smart (Phone) Solution
for Mobile Diabetes Management
Mary Thompson, 40
PERSPECTIVE
Medtech: What’s in a Name?
David Cassak, 4
 Who Will Pay for Wearables?
 Drug Compliance: A Wearable
Device Improves Drug Efficacy with
Patient-Specific Timing and Support
 A Digital Biomarker Helps Hospitals
Treat Post-Op Patients
 Cardiovascular Monitoring: The
Power of Continuous Data
 Epilepsy: Predictive Capabilities
Save Lives, Empower Patients
CONNECTED HEALTH
WEARABLE
TECHNOLOGIES:
What’s in it for Medical
Device Companies?
Mary Stuart, 6
Fastest Growing Categories in Connected Health
2014-2015 Overall Funding and YoY Growth
Figure 1
$250M
$500M
Personal Health Tools
and Tracking
Care Coordination Life Sciences
Technologies
223%
152%
49%
2014 funding 2015 funding 2014-2015 YoY growth

2. THE MEDTECH STRATEGIST © 2016 Innovation In Medtech, LLC. All rights reserved.
6 CONNECTED HEALTH
Healthcare is moving towards a value-based payment system,
which, in theory, should reward wearable technologies that
can measure, coach, and teach patients to keep them healthy
and out of the highest cost care settings. But investors and
many medical device companies themselves remain skeptical
as to the clinical value of wearables, and it is far from clear
how they can get paid for their investments in wearable
medtech. Some early movers believe they can overcome the
burden of proof.
WEARABLE
TECHNOLOGIES:
What’s in it for Medical
Device Companies?
From Nike to Nikon, Validic to Victoria’s
Secret, all kinds of companies are entering
the many faceted industry known as digital
or connected health. The unsustainability of
a US economy that spends almost 20% of its
GDP on healthcare; as well as efforts to re-
form payment models, the growing burden
of caring for elderly patients with chronic
disease, the ubiquity of smart phones, and
rising patient out-of-pocket costs are factors
driving a systemic transformation in health-
care and a corresponding flurry of innova-
tion to solve new kinds of problems.
Healthcareinnovatorstodaygowellbeyond
the traditional medical product industries,
that is, the pharmaceutical, medical device,
and health information technology develop-
ers (see “Medtech: What’s in a Name,” in this
In this article:
Who Will Pay
for Wearables?...... 9
Drug Compliance:
A Wearable Device
Improves Drug
Efficacy with
Patient-Specific
Timing and
Support .................11
A Digital Biomarker
Helps Hospitals
Treat Post-Op
Patients .................14
Cardiovascular
Monitoring:
The Power of
Continuous
Data .................17
Epilepsy: Predictive
Capabilities Save
Lives, Empower
Patients .................19
by
MARY STUART
........

3. MARCH 16, 2016
7CONNECTED HEALTH
issue). Intel, Qualcomm, Apple, Google, Ford Motor Compa-
ny, and Ralph Lauren are but a few of the strange new bedfel-
lows in the healthcare industry, which these days is defined
more broadly to encompass both products that address sick-
ness and promote/maintain health. Healthcare promises to
be one of the largest consumer markets ever and there are
business opportunities for strategic investors.
The digital health accelerator Rock Health estimates that
in 2015 a total of $4.5 billion in venture funding poured into
connected health, with a preponderance of seed- and Se-
ries A-stage deals. Some 267 digital health companies each
raised more than $2 million last year. Digital health turned
in a strong performance in terms of exits as well. M&A activ-
ity in the space nearly doubled over the previous year, with
187 deals worth $6 billion, and five IPOs raised $1.4 billion
in 2015 to create $8 billion worth of market capitalization.
Wearable devices and biosensors attracted $499 million
of the total amount invested. Indeed, Rock Health identified
Personal Health Tools and Tracking (including wearables)
as the fastest-growing category in connected health. This
highlights the important role consumers/patients can play
in achieving the “Triple Aim” goals of healthcare, which in-
clude improving the patient experience of care, improving
the health of populations, and lowering the per-capita cost
of healthcare (see Figure 1).
The individual has been an untapped resource in health-
care, and there has been much discussion on the part of
providers, innovators, and payors, including the US govern-
ment, about how to change
this dynamic. The US govern-
ment is supporting research in
the nascent field of precision
medicine, which aims to give
clinicians tools to customize
medicine (and disease preven-
tion) to the individuals under
their care based on the pa-
tient’s unique genetics, envi-
ronment, and lifestyle factors.
President Obama recently
launched the Precision Medi-
cine Initiative with a $215 mil-
lion investment earmarked in
the 2016 budget. Intel Corp.
and Verily (formerly Google
Life Sciences; now part of
Alphabet Inc.) have already
signed up to develop capabili-
ties to support the initiative.
Wearable technologies, which use patient-worn sensors
to provide objective measurements of vital signs, activity
levels, and other measures of physiology, will be key tools
in this new framework. And automating certain kinds of
tracking with devices, sensors, and continuous monitoring
technologies now makes it possible to get more and better
data from patients, who are notoriously non-compliant with
anything medical, especially when it comes to self-reporting
data. The information gleaned by wearable sensors could
result in the creation of digital biomarkers (a term coined by
Rock Health)—signatures of disease that can be gleaned by
noninvasive monitoring, shared, combined with other data,
and mined digitally to provide medical insights never before
possible. That’s the promise of wearables and the reason for
much of the hope and optimism in the scientific and invest-
ment communities.
But the medical device industry is less sanguine, de-
spite the fact that it possesses perhaps the best skillsets
for developing these new technologies. Medical device
companies excel at engineering and have sensor expertise,
experience in the clinical validation of products, relation-
ships with physicians and providers, and an understanding
of regulatory processes. However, the ultimate product
of wearable (and other connected health) technologies is
data, and while medical device companies want to operate
in this space, for many, it is outside the normal bounds of
their core product businesses. And, perhaps most impor-
tantly, the business models for how they’ll get paid for their
investment are still unclear.
Figure 1
Fastest Growing Categories in Connected Health
2014-2015 Venture Funding* and YoY Growth
*Only includes US deals>$2M, data through Dec. 8, 2015
Source: Rock Health
Fastest Growing Categories in Connected Health
2014-2015 Overall Funding and YoY Growth
Figure 1
$250M
$500M
Personal Health Tools
and Tracking
Care Coordination Life Sciences
Technologies
223%
152%
49%
2014 funding 2015 funding 2014-2015 YoY growth

4. THE MEDTECH STRATEGIST © 2016 Innovation In Medtech, LLC. All rights reserved.
8 CONNECTED HEALTH
According to a report from Research and Markets, the
global wearable device market was poised to reach $23 bil-
lion in 2015, but the majority of those revenues came from
consumer products for which people pay out-of-pocket,
from giants like Apple and manufacturers of products for
sports, fitness, and other wellness applications (Fitbit, for
example, reported 2015 revenues of $1.86 billion).
For wearables that support chronic disease states, the
regulatory hurdle is higher and the payment model less re-
warding. Wearable devices supporting patients around par-
ticular disease states often require FDA approval, they must
provide clinically validated measurements and reliability,
and they need to somehow encourage patients to stick with
them. Medical device companies haven’t historically directly
targeted patients, and that requires at least one new skill,
that of understanding and influencing patient behavior so
that the product doesn’t end up in the drawer soon after
they get it. As Joseph Kvedar, MD, VP, Connected Health at
Partners Healthcare in Boston (and co-author of the recently
published book, “The Internet of Healthy Things”) recently
remarked to The MedTech Strategist, “If the patient doesn’t
use the device, there goes the business model.”
Healthcare is moving away from a fee-for-service reim-
bursement framework to pay-for-value. Medical device
companies used to operate in an environment where their
prices were accepted by healthcare providers who were
willing to add them to their costs; however, these dynamics
have changed. Several models have developed that reward
providers for saving money on patient care by coordinating
care, keeping patients out of the highest-cost care settings,
and keeping them healthy. Under these models, which put
providers at risk for the cost of care, the power (in terms
of product pricing and adoption) shifts to healthcare provid-
ers, and new technologies must not only prove their clini-
cal worth, but also make a strong case for either direct or
indirect cost-savings. Accurate wearable monitors allow
providers to manage by exception, for example, such that
caseworkers and other caregivers don’t have to call their pa-
tients as often. As a result, a caseworker limited to a work-
load of 75 patients can now handle perhaps hundreds.
In the past, when doctors had more of a say, proving clini-
cal benefit was often enough to get a new product adopted,
and often at a significantly higher price. Those days are gone
now. In this new environment, where a product or a technol-
ogy is but one small component of what goes into providing
all the care for a patient, both in and outside of the hospital,
medical device companies will face an even higher hurdle in
demonstrating the benefits of new technologies.
That hasn’t daunted them, however. The medtech pio-
neers who first introduced remote monitoring technolo-
gies to support their devices—for example, Medtronic plc,
which developed its CareLink platform years ago to connect
cardiac and diabetes implantable devices with information
capabilities to service providers, are also aiming to be ac-
tive in connected health and wearables. Other examples
include Philips Healthcare and ResMed Inc., which also
were ahead of the curve in supporting patients by home
monitoring. And, as always, many small, emerging com-
panies also hope to be part of the avant-garde. Scores of
start-ups have emerged to help patients meet their goals
around healthy eating and sleeping, to help them better
understand the triggers for their disease flare-ups, and to
better manage chronic diseases like asthma, heart failure,
and diabetes. Start-ups aim to increase patient compliance
with prescribed drugs or lifestyle changes, monitor infants,
treat pain, screen for cancer, improve memory and cogni-
tion, diagnose and monitor Parkinson’s disease, monitor
levels of light—you name it, companies are measuring it.
But not many provide information and analysis that make a
difference in the health of patients, and as a result, few ap-
pear to have real staying power. In “The Internet of Healthy
Things” (which was released in January 2016), the author
notes that there are currently 165,000 health-related apps
sold in 62 online stores, but the vast majority are never
downloaded, and of those that are, the vast majority of
people stop using them within two weeks.
For this article, we interviewed a select crew of emerging
companies that could make a difference: Chrono Therapeu-
tics Inc., in pharmaceutical compliance; GI Logic LLC, which
has a new vital sign or digital biomarker based on measure-
ments of the gastrointestinal system; iRhythm Technologies
Inc., which uses technology to monitor patients to look for
cardiac rhythm disorders for longer periods of time and so
diagnose and uncover new patterns of disease; and Empat-
ica Inc., which hopes to provide epilepsy patients and their
caregivers with predictive alerts that help them manage their
lives better (and, the company hopes to demonstrate, even
prevent SUDEP, the sudden, unexplained death of someone
with epilepsy). These companies believe they’ve found a way
to get paid in today’s environment, and they are also working
on future applications that surround the individual patient
with support, where rewards are less clear.
For wearables that support chronic
disease states, the regulatory hurdle
is higher and the payment model
less rewarding.

5. MARCH 16, 2016
9CONNECTED HEALTH
One initiative towards that goal is the
aggregation of information from wear-
able devices and apps patients can use
to empower both themselves and the
hospital system. Richardville’s group
has developed CarolinasTracker, a free
app that that accepts information from
activity trackers like Fitbit and other
consumer tracking devices for anyone
out in the community who wants it,
and MyCarolinasTracker, a free app
that aggregates data from wearable
devices used by patients the hospital
system serves.
“Taking care of our patients is part
of our business, but the other part is
keeping them healthy and well,” says
Richardville. His statement is some-
what surprising, because we haven’t
traditionally thought of hospitals as in-
stitutions that sell health and wellness;
they take care of sick people, right?
But the healthcare landscape is
changing. After two years of planning,
in February 2016, Carolinas HealthCare
System launched its clinically integrated
network (CIN). A CIN strategically com-
bines (i.e., does not require the pur-
chase of practices) multiple healthcare
providers and systems into one larger
network in which healthcare provid-
ers can streamline the delivery of care
across primary care and specialty phy-
sicians to improve the quality of care
and lower costs. CINs can negotiate col-
lectively with payors to get better re-
imbursement arrangements (collective
bargaining is prohibited under other
kinds of hospital or physician affilia-
tions). The model is not unlike the Ac-
countable Care Organization, a type of
network that gets to share in whatever
savings it can achieve in the delivery of
care, except ACOs currently only serve
Medicare patients (Partners Health-
care, mentioned above, participates
in such an organization, called Pioneer
Accountable Care Organization). Since
the passage of the Affordable Care Act,
the number of CINs has grown from a
handful to more than 500 in the US, ac-
cording to the Advisory Board.
In the press release announcing the
launch of its CIN, Carolinas HealthCare
System describes its initiative: “The
CIN will have several patient popula-
tions and initiatives as part of its fo-
cus areas. Some of those initiatives
will include management of chronic
diseases and preventative screenings,
reducing the cost of care, improving
efficiency, avoiding unplanned read-
missions, preventable care, and overall
quality improvement.” Those are the
oft-expressed goals of healthcare to-
day, but now, the Carolinas CIN will be
paid a per-member per-month fee to
achieve them. “Part of the opportunity
to lower my costs and achieve better
outcomes is to keep [patients] healthy
and well, manage chronic disease, and
to optimize new channels such as vir-
tual care and retail.” says Richardville.
For employees of the Carolinas
HealthCare System, that model is al-
Who Will Pay for Wearables?
“The patient is the most under-utilized resource in healthcare,” says Craig Rich-
ardville, senior VP and chief information Officer for Carolinas HealthCare System,
a network of 900 care locations throughout North and South Carolina. “As we
have learned from other industries like retail and financial services, a lot of work
that used to be done by clerks is now being done by the consumer. We shop
online and our financial services come to us online. And most importantly that
type of interaction is what consumers prefer.” Healthcare has lagged in tapping its
consumers, and Carolinas HealthCare System aims to lead that effort.
Figure 2
Business Models for Wearable Medical Technologies
Source: The MedTech Strategist
CONSUMER PAYS
out of pocket
(NeuroMetrix Quell
pain device; Empatica
epilepsy monitor)
REIMBURSEMENT
under existing fee-for-
service framework:
bundled DRG code
(AbStats in the surgery
market) alternative to
other reimbursed
technology (iRhythm)
PRIVATE PAY
Insurance company or
Employer reimburses
members/employees
for using health
technology (Chrono
Therapeutics)
PAY-FOR-VALUE:
Accountable Care Organization,
Clinically Integrated Network,
Population Health Manager, or
other “at-risk” provider pays for
technologies that help them
achieve goals of lowering the
per-patient cost of care in
exchange for a share in the savings

6. THE MEDTECH STRATEGIST © 2016 Innovation In Medtech, LLC. All rights reserved.
10 CONNECTED HEALTH
ready in place. The hospital system
has more than 60,000 employees and
is self-insured, as are a lot of large
companies. “Every dollar that we pay
comes out of our own pocket,” Rich-
ardville points out, “so every dollar we
save goes straight to the bottom line.”
He notes that “starting with Medicare,
Medicaid, and some of the larger pay-
ors, we’re starting to see carveouts.
There is a whole spectrum of value-
based care, from bundling services to-
gether to taking care of a whole popu-
lation. For certain procedures, we get
a fixed payment, so it’s up to us to do
it at a lower cost while achieving bet-
ter or equal outcomes."
That has always been true of the
DRG system, where hospitals get a
fixed payment for certain procedures,
and to the extent that technologies
can improve margins, they’re attrac-
tive. What’s different today? “Now we
are actually managing the whole pa-
tient from beginning to end—all their
encounters with healthcare, preventa-
tive care immunizations, the flu or a
cold, we are responsible for all of that
and we bear full financial risk. We are
incentivized to keep you well.”
Personal tracking devices and
wearables become important under
this scenario both from the aspect
of contributing to a more complete
picture of the patient, and in terms
of patient engagement. “Literature
demonstrates that when patients are
engaged in their health and health-
care, they achieve better outcomes,
better results, or better results faster,
and typically that happens at a low-
er cost.” Technology enables these
goals. “When you monitor or man-
age people with technology, you
can discharge them earlier. You can
get them into the right care setting.
Today, a lot of people default to the
emergency department, which is the
most expensive way to go in.
According to a recent hospital Cost
Accounting Survey, conducted by the
Health Information Management and
Systems Society (HIMSS), 46% of re-
spondents said that their facility par-
ticipates in an alternative payment
system such as a shared savings pro-
gram or a bundled payment program
with a larger employer in a particular
area (see “HIMSS Survey Data Reveals
Growing Provider Reliance on Con-
nected Health Tools,” in this issue).
Under the new pay-for-value mod-
el in healthcare, the customers of
medical devices are no longer physi-
cians and hospitals, but organizations
at-risk for the cost of healthcare—
at-risk health systems like Carolinas
HealthCare and Partners HealthCare,
insurance companies, and employers,
particularly those that are self-insured.
Medical device companies will need
to sell directly to those organizations
and share their goals, which include
keeping the patient healthy. That’s
the framework in which wearables
present a promising new business op-
portunity, if manufacturers can get
paid for them.
Medical device companies can still
find pockets where their wearable
devices, in improving upon a diag-
nostic or therapy that is already be-
ing done by other means, can gain
reimbursement (see Figure 2). Some
companies are taking their wear-
ables directly to the consumer mar-
ket, as has NeuroMetrix Inc., with its
Quell wearable neurostimulator for
pain. A Quell starter kit doesn’t re-
quire a prescription and costs $249.
The device was launched in July 2015
and by year-end the company had
shipped 6,675 devices, bringing in
$1.48 million. NeuroMetrix is obvi-
ously having some success, although
the direct-to-consumer route can be
risky since the majority of people are
so unpredictable when it comes to
compliance with anything related to
their health.
In connected health and wearable
technologies, there won’t be a one-
size-fits-all business model, but the
business models for medical device
companies will change, as will the
target of the sales call.
Partners HealthCare’s Joseph Kve-
dar leaves one piece of advice for
medical device companies during
this transformation of healthcare:
“Under value-based payment mod-
els, the provider organization gets
a fixed budget. They begin to treat
suppliers in the same way Walmart
does, negotiating hard and forcing
supplier prices down. Medical device
companies need to get ready to of-
fer competitive services in this new
economy.”
“Now we are actually
managing the
whole patient from
beginning to end—
all their encounters
with healthcare,
preventative care
immunizations, the
flu or a cold, we are
responsible for all of
that and we bear full
financial risk. We are
incentivized to keep
you well.”
—Craig Richardville

7. MARCH 16, 2016
11CONNECTED HEALTH
The proven efficacy of drugs is based
on rigorously controlled clinical trials
but in the real-world, the patient is a
wild card capable of single-handedly
throwing off the results. With all
drugs, compliance is a major issue.
Patients are compliant about taking
pills as directed less than 50% of the
time; for transdermal patches, com-
pliance is believed to be even lower.
Obviously, drugs can’t help if patients
don’t take them.
Chrono Therapeutics Inc. has de-
veloped a wearable device and smart
phone-enabled support platform that
offers several strategies (compliance
among them) to mount a multi-pronged
attack that will help patients succeed on
their drug therapies.
The company was initially founded in
2003 by Guy DiPierro, an attorney spe-
cializing in corporate M&A and technol-
ogy licensing, who licensed some pat-
ents concerning biologically timed drug
delivery from the University of Basel in
Switzerland. In 2013, Alan Levy, PhD, a
seasoned veteran of both the pharma-
ceutical and medical device industries,
joined as chairman and CEO. Previously,
Levy served as the founding CEO of the
pharmaceutical firm Incline Therapeu-
tics, which was acquired by The Medi-
cines Company; the president and CEO
of Northstar Neurosciences, which was
developing an innovative neurostimu-
lation therapy for stroke survivors; and
also as the CEO of Heartstream Inc. and
the president of Heart Technology Inc.
With Levy at the helm, Chrono Thera-
peutics began crafting a broader strat-
egy, including compliance monitoring
and behavioral support. “Our focus is
on improving patient outcomes by put-
ting together four distinct technolo-
gies: biologically timed drug delivery,
compliance monitoring, behavioral
support, and data analytics,” says Levy.
A Large Market and
a Clear Business Model
For its initial commercial product, the
company is developing a smoking ces-
sation device, which provides a good
entry point for its platform for a cou-
ple of reasons. First, smoking is a ma-
jor public health problem. According
to the US Centers for Disease Control
and Prevention (CDC), cigarette smok-
ing kills more than 480,000 people in
the US each year, 41,000 of them from
exposure to secondhand smoke. In ad-
dition, smoking-related illness in the
US costs more than $300 billion a year,
including nearly $170 billion in direct
medical care for adults and $156 bil-
lion in lost productivity. The CDC esti-
mates that in 2014, 40 million adults
were cigarette smokers.
Second, nicotine, the established
smoking cessation drug, has been
safely used for 20 years, which lowers
Drug Compliance:
A Wearable Device Improves Drug Efficacy with Patient-Specific
Timing and Support
CHRONO THERAPEUTICS
Hayward, CA
Sector: Improved Outcomes for
Pharmaceuticals with Wearable-
Enabled Support
Founded: 2003 initially, but
expanded its vision in 2013
Contact: Alan Levy,
ALevy@chronothera.com
Founder: Guy DiPierro, who
licensed the patents for
biologically-timed drug delivery
from the University of Basel in
Switzerland.
Funding to date: $34 million
from a Series A round. Investors
include Canaan Ventures, 5Am
Ventures, Fountain Healthcare
Partners, Mayo Clinic, GE
Ventures and Rock Health.
The company has also received
two grants from the National
Institutes of Health.
How the company gets paid:
Under the Affordable Care
Act, FDA-approved smoking
cessation products are
reimbursed and many companies
reimburse their employees for
smoking cessation products
and programs.

8. THE MEDTECH STRATEGIST © 2016 Innovation In Medtech, LLC. All rights reserved.
12 CONNECTED HEALTH
the regulatory hurdles for the company.
It will be eligible to pursue the 505(b)(2)
regulatory process, which allows com-
panies to rely on the safety and toxicity
data of previously approved products.
Finally, in this application, the busi-
ness model is established. Under the
Affordable Care Act, FDA-approved
smoking cessation products are reim-
bursed. A large number of Fortune 100
companies also provide smokers with
cessation support programs, includ-
ing fully covered smoking cessation
medications (e.g., nicotine patch/gum
or prescription drugs like varenicline),
since studies have shown that each em-
ployee who quits smoking saves com-
panies $6,000 per year, approximately
half in healthcare costs, the other half
in lost productivity. Going in, the com-
pany has a clear idea of how it will get
paid for its product. (Levy also notes
that GE Ventures is an investor in Chro-
no Therapeutics. It has a personal inter-
est in the space, partly because it is de-
veloping sensors, and partly because it
is a large self-insured corporation. Says
Levy, “They insure close to one million
lives for healthcare, and they estimate
that about 20% are smokers, so if we
could get all of them off smoking, they
could save about $1 billion!”)
Therapy on the Patient’s
Own Time
Levy explains how each of Chrono
Therapeutics’ four technologies helps
patients in the smoking cessation ap-
plication, starting with biologically
timed drug delivery.
“In the case of smoking cessation, bi-
ological timing means preventing crav-
ings from occurring, and studies have
shown that if you can do that, you can
significantly improve the quit rate.”
Smokers crave cigarettes at well-
known and predictable times. The
strongest craving occurs in the morn-
ing, when the individual first wakes up
after having been deprived of nicotine
for seven or eight hours. “That’s why
one out of four smokers lights up the
first cigarette within five minutes of
waking up.” The other three quarters,
he notes, smoke within 30 minutes of
waking. Smokers also crave nicotine
at mealtimes because metabolism in-
creases when one eats food, including
the metabolism of nicotine, which in-
creases by about 50%, Levy says. Final-
ly, the evening is another difficult time
when smokers are tempted to smoke
because of social cues or ingrained
behavioral habits; because they’re
around other smokers, for example, or
because they’re having a glass of wine.
The Chrono Therapeutics’ solution
starts with a transdermal drug delivery
wearable pod (which can be adhered
to any part of the body) that dispenses
nicotine in such a way as to avoid crav-
ings at these specific times. The smoker
will enter the wake-up time (just as if he
or she were setting an alarm on a clock)
and the wearable pod will deliver nico-
tine an hour and a half before wake-up
to prevent the first strong craving of the
day. The patient will continue to get
nicotine throughout the day, but will
receive peak levels in anticipation of
meal times (see Figure 3). The device
stops drug delivery at night because
nicotine can interfere with sleep and
cause insomnia. While transdermal
nicotine patches result in a quit rate of
only 5-10%, studies have shown that bi-
ologically timed nicotine results in quit
rates of 30-50%, according to Levy.
Leveraging Support Services
through Technology
That’s only part of the solution, how-
ever. The second pillar of the compa-
ny’s strategy deals with compliance.
The drug delivery
pod contains sen-
sors and is Blue-
tooth-enabled, so
it can communicate
with a smart phone
(see Figure 4).
Every evening, the
compliant user will
put in a new nico-
tine cartridge, an
event that sends a
signal to the user’s
smart phone and
also to a monitoring
system overseen by
Chrono Therapeu-
tics. In addition, the
sensor signals when
nicotine is being de-
livered. “We know
Figure 3
Chrono Quit Smoking Wearable Delivers Nicotine When Patients Need it Most
Source: Chrono Therapeutics Inc.

9. MARCH 16, 2016
13CONNECTED HEALTH
that you are using it and that you are
getting the drug at the appropriate
time.” This feature, which provides the
sense that the patient is being watched
over, has proven to be important for
patient engagement with wearables
generally speaking, but it’s particularly
helpful in the smoking cessation appli-
cation. Levy notes that smokers have a
chemical dependency, which the nico-
tine replacement therapy addresses,
but smoking is also a habit, which is
why it’s so difficult to quit. “The more
support and reinforcement you can
give smokers, the better they do.” Levy
points to studies that show that just
having nurses or other professionals
call smokers every two weeks helps im-
prove quit rates. “But that is not a very
scalable approach. We want to be able
to reach 20 million people who are try-
ing to quit each year in the US.”
Thus, if the patient doesn’t comply
with changing the cartridge, he or she
will get a reminder message via the
program’s mobile app. Through the
app, patients will also get periodic en-
couragement, and they can become
part of networks that are similar to the
communities that Fitbit users set up, to
compare themselves, anonymously, to
others who share the same goals.
To deal with social cues that tempt
the smoker, there is a “crave” button
on the wearable pod. “They can press
the button to record the craving and
trigger an immediate response from
the app: ‘Take a deep breath. Walk
around for a few minutes’ and the
craving will pass.” With the patient’s
permission, family members can also
receive alerts so they can provide en-
couragement and support. “All of the
things that have been demonstrated
to work when clinicians and other care
givers call patients, we are able to do
via smart phone and just in time, as op-
posed to every two weeks,” says Levy.
The smoking cessation product
doesn’t yet have FDA clearance;
the company will be meeting with
the FDA to discuss the next studies,
which will likely
revolve around
demonstrating
that the quan-
tity of nicotine
delivered over
a 24-hour pe-
riod is compa-
rable to previ-
ously approved
products.
In the near
term, the com-
pany is scaling
up a pilot pro-
duction line of
its smoking ces-
sation product
to support pivotal trials, with the goal
of filing in the US and Europe at the
end of 2017 or early 2018.
A Platform for Many Diseases
Chrono Therapeutics has future
products in its pipeline: indications
where patients will benefit from bio-
logically timed drug delivery, compli-
ance monitoring, and behavioral sup-
port. Parkinson’s disease (PD) is one
such application. Many PD patients
suffer from levodopa-induced dys-
kinesia, or LID, and experience mo-
tor fluctuations as a result of chronic
treatment with the drug. “When they
wake up, they are often very stiff and
have difficulty getting out of bed un-
til they take their medication. We can
deliver that drug about an hour before
they get up so they can get right up
and function.”
While the smoking cessation product
will be sold over-the-counter (OTC) at
a price comparable to other smoking
cessation products, the Parkinson’s
product would contain drug and be
prescribed by a physician. The compa-
ny hasn’t arrived at a pricing model for
this product, but it will take value into
consideration. Value will be assessed in
part by the degree to which, in reduc-
ing symptoms of the disease, the Chro-
no Therapeutics product is able to cut
down on office visits or take other costs
out of the equation.
Levy says he’s not aware of any other
drug-delivery company that’s wrapped
its arms as broadly around the patient,
but Proteus Digital Health comes
closest. Proteus has developed a tiny
ingestible sensor that can be manufac-
tured into pills to record patient drug
dosage compliance and other infor-
mation. The pill communicates with
a patient-worn patch that can send
information to a smart phone. Proteus
and Otsuka Pharmaceutical Co. Ltd.
worked together to turn Abilify (ar-
ipiprazole, a treatment for schizophre-
nia and other severe mental illnesses)
into the first “digital drug” to file an
NDA with the FDA.
Levy notes that Proteus is exploring
applications that provide great value,
for example, for patients with neu-
ropsychiatric problems who aren’t
compliant, or to improve compliance
for very expensive medications. He
points to Sovaldi (sofosbuvir, from
Gilead Sciences Inc.) as another such
an example. “It can cure Hepatitis C,
but you have to stay on it for two to
three months and if you stop taking
it, you have to start all over again.”
Sovaldi costs $80,000 for a course of
treatment. “If you can improve com-
pliance, there are enormous savings
to the healthcare system.”
Figure 4
Chrono Wearable Drug-Delivery Pod and App
Source: Chrono Therapeutics Inc.

10. THE MEDTECH STRATEGIST © 2016 Innovation In Medtech, LLC. All rights reserved.
14 CONNECTED HEALTH
Wearable biosensors provide the
opportunity for the noninvasive and
continuous collection of physiologic
signals from patients to the degree
that patterns of injury and disease
can now be seen in ways that were
never before possible when diagno-
sis and monitoring relied on episodic
measurements made in clinical set-
tings. New markers of disease are be-
ginning to emerge; what Rock Health
calls “digital biomarkers,” signatures
of disease states created through the
power of data capture and analytics.
These digital biomarkers have some
advantages over conventional blood
biomarkers, since they can often be
obtained in a noninvasive manner,
combined with other relevant infor-
mation, and shared digitally.
Many things can be tracked unob-
trusively as patients go about their
lives: heart rate, levels of activity, tem-
perature, seizures, sleep patterns, the
list appears endless. But the full value
of continuous tracking and data col-
lection is only realized when it results
in insights that can influence clini-
cal decision-making, patient behav-
ior, health, and economic outcomes.
That’s simply not the case with many
trackers on the market today.
And, there is one other important re-
quirement for the success of medical
wearable technology. Jim Beeton, Co-
CEO of GI Logic LLC, says he and his Co-
CEO Gary J. Sterling are experienced at
looking at new medical technologies.
Beeton began his career in the cardiac
rhythm division of Medtronic in sales
and sales management and moved on
to work in the sleep testing industry,
most recently as managing partner
of Affinity Partners LLC. Sterling also
began his career at Medtronic and is
the former CEO of EP Dynamics Inc.,
the developer of a cardiology product
designed to make transseptal access
safer. Beeton says, “My partner and I
have looked at a lot of these wearable
companies, but our first question is
always, “how is this company going to
monetize this technology?”
GI Logic, which is developing a pa-
tient-worn biosensor that reveals the
functional status of the gastrointesti-
nal system, believes it solves both the
clinical and business requirements. The
company will launch its first product
into the hospital surgery market, where
it will give clinicians objective informa-
tion they’ve never had before to deter-
mine when to feed patients postopera-
tively. The new monitor, called AbStats,
has the potential to avoid postopera-
tive complications, speed healing, and
shorten length of stay.
Beeton says he and Sterling were
working on a wearable device of their
own with the help of William Kaiser,
PhD, a physicist and an expert in sen-
A Digital Biomarker
Helps Hospitals Treat Post-Op Patients
GI LOGIC LLC
Pasadena, CA
Sector: Postsurgical Care and
Gastroenterology
Founded: 2013
Contact: James D. Beeton, Co-
Founder/CEO, jbeeton@gi-logic.
com
Business Founders: Jim Beeton,
co-founder and managing
partner of Affinity Partners LLC
(provided patient compliance
solutions to sleep centers); a
former VP at CardioSom LLC
(respiratory and therapeutic
sleep devices), Cardiac Rhythm
management at Medtronic;
and Gary Sterling, CEO of
EP Dynamics Inc. (Cardiac
EP space)
Scientific Founders: Brennan
Spiegel, MD, MSHS; Director
of Health Services Research,
Cedars-Sinai Health System,
Director, Cedars-Sinai Center
for Outcomes Research and
Education (CS-CORE) Cedars-
Sinai Site Leader, Clinical
and Translational Science
Institute(CTSI); and William
J. Kaiser, PhD, Professor,
Electrical Engineering
Department, Co-Director,
UCLA Wireless Health Institute,
who is a physicist and an expert
on sensors
Funding to date: $1.8 million
from individual investors;
seeking investment in an $8
million Series A round
How the company gets paid:
Bundled into existing DRG
codes for particular surgeries

11. MARCH 16, 2016
15CONNECTED HEALTH
sors who is the co-director of the UCLA
Wireless Health Institute in Los Ange-
les. In the course of that work, the two
became acquainted with another proj-
ect Kaiser was working on with gas-
troenterologist Brennan Spiegel, MD,
then associate professor of medicine
in the division of digestive diseases at
the UCLA School of Medicine. Spiegel
had asked “Why are gastroenterolo-
gists the only clinicians that can’t get
a relevant vital sign on which to base
treatment for their patients?” Other
specialties can rely on ECGs, blood
pressure cuffs, or pulse oximeters, but
gastroenterologists only have the 200-
year old stethoscope and their subjec-
tive judgments on what they can hear
and feel from the surface of the belly.
Kaiser devised precise vibratory sen-
sors and algorithms to categorize in-
testinal movements, and Beeton and
Sterling gained an exclusive worldwide
license to the technology from UCLA.
They founded GI Logic in 2013 with
$1.8 million in funding from individual
investors to further develop and com-
mercialize AbStats, the first noninva-
sive monitor for diagnosing functional
disorders of the alimentary tract.
AbStats gained FDA 510(k) clearance
in December 2015. Its predicate device
was the electronic stethoscope, but
AbStats is much more capable. “While
a clinician using a stethoscope listens
for 10-15 seconds and moves the
stethoscope around, we put vibratory
sensors on the patient’s belly where
they take in a broad range of vibrations
created by both muscular and food
movements—and not just the sounds
that you can hear—on a continuous
basis.” The system also gives back to
clinicians a value by which to guide
therapeutic intervention. The company
is conducting studies on known disease
states within the gut such as gastropa-
resis and pancreatitis, and says Bee-
ton, “We are able to absolutely classify
what these vibrations mean and to give
back useful information.”
To Feed or Not to Feed
In the post-op setting, that informa-
tion will guide clinicians as to when to
safely feed patients to set them on a
course of healing and get them out of
the hospital. As a result of surgery and
anesthesia, in most patients, the diges-
tive tract is stunned for a period follow-
ing surgery and is unable to move food
along. Patients are not released from
the hospital until it’s clear that their
gastrointestinal motility has returned
and they can tolerate food.
Doctors don’t have objective nonin-
vasive tools to determine whether or
not a patient has postoperative ileus
(the term for prolonged paralysis of
the gastrointestinal tract causing in-
tolerance of oral intake). They often
rely on the stethoscope, patient’s re-
ports of pain levels and whether or not
they’ve had a bowel movement, and
clinical examination. The gold standard
for measuring intestinal motility, antro-
duodenal manometry, requires the in-
sertion of a nasogastric tube (it goes in
through the patient’s nose and down
the throat), to measure the GI tract’s
muscle movement by measuring pres-
sure waves. That procedure is not well
tolerated by patients; not feasible in
many cases, since patients need to
discontinue certain drugs; and is time
consuming and expensive, as are other
invasive assessment tools.
Since the 1990s, many hospitals have
implemented a protocol called ERAS
(Enhanced Recovery After Surgery) a
postoperative care plan designed to
decrease complications, hasten re-
covery, and shorten hospital stay, one
directive of which is to feed patients
as early as possible. However, says
Beeton, in 25% of cases, patients are
fed before they’re ready, food festers
in the stomach, and several negative
consequences can happen. Patients
may feel discomfort or vomit. What’s
worse, aspirated food can lead to
pneumonia, additional surgeries, early
readmission, and even death.
According to some studies, postop-
erative ileus (POI) prolongs hospital
length of stay by 30% and, in the US,
is responsible for excess costs of more
than $1.46 billion annually. There is no
definitive set of codified risk factors to
guide surgeons or bedside caregivers
as to which patients may or may not
develop POI. AbStats will give physi-
cians objective information about in-
testinal motility so they can determine
what and when to feed patients.
AbStats consists of a pair of dispos-
able biosensors that detect intestinal
vibration signals. It is placed on a pa-
tient’s abdomen and connects to a
small bedside computer with a moni-
tor that measures intestinal event
rates and displays a graph, which is a
trend analysis over time, as well as a
numeric value per hour of these in-
testinal events. “In studies conducted
using the system, these rates corre-
lated to physiologic digestive status.
These event rates thus can now allow
clinicians to make informed decisions
on when and how to advance patient
feeding,” says Beeton.
For the postoperative ileus indica-
tion, the company first validated its
new measurement (in a study led by
Brennan Spiegel, MD) in eight healthy
controls, seven postoperative patients
tolerating the fast-track feed protocol,
and 25 patients with evidence of post-
operative ileus. AbStats measurements
showed high motility rates in patients
tolerating fast-track feeding versus
those with postoperative ileus.
In a second peer-reviewed study (by
Kaneshiro et al and published Septem-
ber 25, 2015 in the Journal of Gastro-
intestinal Surgery) the investigators
developed an automated prediction
rule about the probability of a patient
developing postoperative ileus, but cli-
nicians were blinded to the values. The
study recruited 28 patients undergoing
colorectal surgery, and nurses and sur-
geons delivered care as they normally
would, without the benefit of AbStats

12. THE MEDTECH STRATEGIST © 2016 Innovation In Medtech, LLC. All rights reserved.
16 CONNECTED HEALTH
guidance. Nine of the 28 patients de-
veloped postoperative ileus. The study
found that AbStats could prospectively
identify early warning signs of evolving
POI and that it could rule out POI with
a high degree of certainty. “It was re-
markable. There were cases where the
patient was clearly in an event range in-
dicative of POI, but feeding was started
and the patient got sicker.”
These are small studies, and the com-
pany has more work to do. It will be spon-
soring a registry called FASTER to see how
physicians utilize the device on a broader
scale, but says Beeton, “We can absolute-
ly detect an early state of ileus.”
Digestive Disorders:
A Healthcare Burden
In the postoperative setting, the com-
pany has access to a reimbursement
and economic framework that makes
its product attractive. “We don’t have
to create a CPT code, we are coming
in as something that is going to guide
care and help the hospital reduce both
length of stay and overall resource utili-
zation under the current code for each
type of surgery.” Saving an average of
one hospital day and the associated
other care expenses for patients who
develop problems related to feeding af-
ter surgery can easily justify the expense
related to AbStats, according to Beeton.
But that’s simply the launch point for
the company. AbStats enters a wide-
open market in noninvasive telemetry
and therapeutic guidance for gastroin-
testinal disorders. According to a survey
of 2,000 US adults, conducted by AbbVie
in 2013, 72% said they had experienced
at least one of the following gastrointes-
tinal symptoms a few times a month or
more: diarrhea, gas, bloating, stomach
pain, frequent bowel movements, unex-
plained weight-loss, and non-specific GI
discomfort, and the majority of them ex-
perienced symptoms for more than six
months. These vague complaints are re-
sponsible for more than 105 million of-
fice visits each year (see Figure 5). It’s an
untapped market opportunity, and one
other company, G-Tech Medical Inc.,
has just begun clinical trials with a prod-
uct that addresses the same market. Its
product measures the electrical signals
that arise from muscular motor activity,
to provide an “ECG of the gut,” accord-
ing to the company.
GI Logic plans to make a smaller, wire-
less version of the biosensor that works
with a smart phone for home use. In the
postsurgical indication, surgeons are al-
ready requesting a home version, says
Beeton. Once the patient gets home and
complains of bloating, gas, and other
symptoms, it’s difficult for the physician
to know what that means. “If patients
had this device at home, clinicians would
have access to a hard number, and they
would have the confidence to say, ‘Come
on in,’ or ‘Stay home, you’re fine, it’s just
gas,’ or ‘Stick with soft foods.’“
The patient wearable for the home
market has the potential to lower admis-
sions. “In 20 to 30 minutes we’ll be able
to tell you if you have a small bowel ob-
struction, gastroparesis, or pancreatitis.”
Indeed, many patients have suffered
with surgical adhesions causing bowel
obstruction and symptoms for years, and
have exhausted thousands of dollars in
inconclusive diagnostic work-ups. “We
can capture these known signatures,
put them into our algorithm and provide
guidance. We want to detect specific GI
disorders so the physicians will know
what they’re up against, versus guessing,
which is what they have to do now.”
AbStats is like a thermometer, Beeton
says. It will take some time and research
to make sense of the information, but
eventually it could become a ubiquitous
tool for diagnosing all sorts of condi-
tions. “We envision that AbStats is go-
ing to be the next vital sign and it will
be applied to virtually every patient that
checks into a hospital or clinic, just like
blood pressure, heart rate, or pulse ox-
imetry. We are the fifth vital sign.”
The company is seeking investors in an
$8 million venture round to help it build
inventory and launch AbStats this com-
ing May.
Figure 5
Digestive Disorders — A Healthcare Burden
Source: GI Logic LLC
Irritable Bowel
Syndrome
Constipation
Timing Feeding Key Component
of Post-Op Recovery vs.
Prolonged Hospital Stays
Diabetes
Gastroparesis
Pancreatitis
Crohn’s Disease
Inflammatory
Bowel
Food Allergies
Obesity
Processed Foods
Performance
Diets
POI
Post-Operative
lleus (paralysis)
Is Gastro
Digestive Tract
Functioning
Properly?
•100M+ Americans •105M Office Visits •14.5M Hospital Admissions
$98 Billion Direct Cost to Healthcare System

13. MARCH 16, 2016
17CONNECTED HEALTH
iRhythm Technologies Inc. got into
the wearables game very early. Electro-
physiologist Uday Kumar, MD, founded
the company in 2006 to develop a more
patient-friendly alternative to the Holt-
er electrocardiographic (ECG) monitor,
and one that by virtue of continuous
monitoring would have a higher di-
agnostic yield. Data published by the
company in February 2016 has borne
out its thesis. (See “Incidence and Tim-
ing of Potentially High-Risk Arrhythmias
Detected Through Long-Term Continu-
ous Ambulatory Electrocardiographic
Monitoring,” Biomed Central Cardio-
vascular Disorders, February 17, 2016.)
The conventional Holter monitor is
the original wearable. It looks, heart-
beat-by-heartbeat, for heart rhythm
abnormalities (indicative of disorders
like atrial fibrillation) in patients over a
24-48 hour period. IRhythm designed
its wearable patch ZIO to capture the
same type of ECG data over 14 days.
The recent study, led by researchers
from Kaiser Permanente Northern Cali-
fornia, found that a significant amount
of arrhythmias were detected well after
the 48-hour limit of Holter monitoring.
Between 2012 and 2013, the study
gathered 128,401 episodes of moni-
toring with the ZIO service. The aver-
age monitoring wear time was approx-
imately ten days and more than 25%
of the monitors were worn for almost
14 days. One-third of the episodes of
sustained ventricular tachycardia, a
serious condition that can be fatal, and
more than half of potentially serious
bradyarrhythmias were detected af-
ter more than 48 hours. Overall, there
was an incrementally higher detection
of potentially high-risk arrhythmias
during the 14-day maximum monitor-
ing period.
The Benefits of a Patient
Friendly Device
The advantages of the ZIO monitor
go beyond its ability to provide a longer
monitoring period. The design helps
improve both patient compliance and
the diagnostic quality of the ECG data.
The old-fashioned Holter monitor is at-
tached to three or four electrodes on
a patient's chest by a tangle of wires.
The ZIO monitor is wireless and not
much bigger than a big BandAid. It also
helps patients correlate symptoms
and activities with rhythm abnormali-
ties through a smart phone app called
MyZIO.
Judy Lenane, executive VP and chief
clinical officer for iRhythm, says that
Holter monitors can’t be exposed to
water, so patients have to disconnect
and reconnect three or four electrodes
every time they shower. By contrast,
patients can leave the ZIO patch on
while they shower (although it can’t
be submerged), so there is no need
to change it during the monitoring
period. Moreover, says Lenane, the
Holter monitor’s wires and electrodes
introduce noise and artifacts. The sig-
nals the ZIO patch captures are much
cleaner because the ZIO device stays
Cardiovascular Monitoring:
The Power of Continuous Data
IRHYTHM TECHNOLOGIES INC.
San Francisco, CA
Sector: Cardiovascular
Monitoring
Founded: 2006
Contact: Judy Lenane, Executive
VP and Chief Clinical Officer
JLenane@iRhythmtech.com
Founder: Uday Kumar, MD, an
electrophysiologist, when he was
a fellow in the Stanford Design
Medical Device Innovation
Fellowship
Funding to date: $68 million in
five venture rounds. Investors
include: Mohr Davidow Ventures,
Synergy Life Science Partners,
St. Jude Medical Inc., New
Leaf Venture Partners, Kaiser
Permanente Ventures, Norwest
Venture Partners, Novo/AS
How the company gets paid:
reimbursed under existing
reimbursement codes, the
family of CPT codes covering
continuous rhythm monitoring
of duration longer than 48
hours

14. THE MEDTECH STRATEGIST © 2016 Innovation In Medtech, LLC. All rights reserved.
18 CONNECTED HEALTH
put; it moves with the patient. The ZIO
also has an integrated symptom but-
ton, which patients can push if they
feel symptoms. “Because of our ana-
lytics, we can look at the patient’s use
of the symptom marker button and see
symptom-rhythm correlations.”
Gaining adequate reimbursement is
a universal challenge for ambulatory
continuous monitoring technologies,
and so it has been for iRhythm, despite
the high diagnostic yield and physician
and patient preference for ZIO. Over
time, iRhythm has succeeded in gaining
reimbursement from the major payors.
Lenane declines to cite specific pricing,
but says, compared to Holter monitor-
ing, "On a per day basis, the ZIO patch
is a better value over time, since our
studies are proving, that longer-term
monitoring captures better informa-
tion about the pattern, characteristics,
and burden of the arrhythmia over
time,” she says.
The Clinical Connection
Alan S. Go, MD, director of Compre-
hensive Clinical Research at the Kai-
ser Permanente Division of Research,
notes that Kaiser Permanente is an
integrated healthcare delivery system,
which provides both care and insur-
ance together. “Kaiser’s incentives are
aligned to make investments in tech-
nologies that have been proven to
improve quality,” he explains. Of the
ZIO study, he says, “This is new infor-
mation, and it demonstrated both that
patients could wear the monitor for
long periods of time and the fact that
a significant percentage of potentially
serious arrhythmias are caught be-
yond the traditional monitoring win-
dow for other technologies.”
Atrial fibrillation (AF), Go notes, is
particularly difficult to diagnose via
Holter monitoring. “A significant pro-
portion of patients get it intermittent-
ly. It comes and goes.” Not only can the
ZIO patch detect AF better than the
gold standard, it also can character-
ize how long a person is in AF during
that 14-day window. “That is actually
very important,” says Go, “because the
time that a patient actually spends in
atrial fibrillation may be important in
terms of other clinical outcomes. Link-
ing that information to what patients
are feeling or doing at the time will all
be really important in helping us un-
derstand and treat patients.” The next
step, says Go, is actually demonstrat-
ing that having this information has
clinical benefits, which will take more
research. “It’s not just demonstrating
that you can find the arrhythmias, but
that you can change the way patients
are managed so that overall clinical
outcomes will improve.” Although
that’s an open question, he adds that
although only one in 500 patients in the
study had sustained ventricular tachy-
cardia, “That is a very serious arrhyth-
mia, and it’s something we wouldn’t
want to miss.”
iRhythm is just offering one type of
a variety of mobile outpatient solu-
tions for cardiovascular monitoring.
Several companies are developing
wireless devices for monitoring dif-
ferent cardiac populations, and many
of them are in the mobile cardiac
outpatient telemetry space (MCOT).
That’s a slightly different market than
that of iRhythm; MCOT offers 30-day
monitoring with near real-time ar-
rhythmia detection and alerting, and
is reserved for different patients than
those iRhythm is targeting—those
that require longer-term monitoring.
For example, Medtronic, which pro-
vides the popular Reveal LINQ, a tiny
wireless, insertable heart monitor for
patients who need long-term continu-
ous monitoring (the device can be used
continuously for up to three years), also
offers a 30-day wireless patch device for
MCOT called SEEQ. In addition, a new
company Biotricity Inc. is also compet-
ing in the MCOT arena with its Bioflux
product. Biotricity is embracing the
full patient-centric vision. It has future
plans to feed that information back to
patients to help them remain compli-
ant with pharmaceutical regimens or
other prescriptions.
To put this into perspective, provid-
ers like Kaiser Permanente have a high
hurdle for proof of cost-effectiveness.
A second study at Kaiser Permanente,
called RHYTHM, is currently studying
how the ZIO patch is used within that
institution.
Now We’re Talking Big Data
As Lenane says, “This is diagnostics
3.0. Wearable biosensors are creat-
ing better information over time.”
The ZIO service, she notes, has been
used on more than 425,000 patients
at nearly 1,000 institutions across the
US. iRhythm now possesses raw ECG
files amounting to 100 million hours
of heartbeat data. “We are starting
to see patterns, and that is helping
us to inform clinicians with a new un-
derstanding of arrhythmias. This was
never able to be done before.” Lenane
notes that iRhythm is using its millions
of data-hours to design better algo-
rithms and processing tools for better
detection.
“We are pulling together data that
helps inform the physician at the indi-
vidual patient level but also at the ag-
gregate. It is the ultimate process im-
provement through Big Data Analytics.”
Indeed, these days, iRhythm is just as
likely to describe itself as a “data ana-
lytics” company as a cardiovascular de-
vice firm. The press release announcing
the appointment of Derrick Sung, PhD,
to the position of Executive VP, Global
Strategy and Corporate Development
said that Dr. Sung would be responsible
for driving new revenue opportunities,
“by monetizing iRhythm's rapidly grow-
ing proprietary algorithms and patient
database in mobile applications, ana-
lytics for consumer health monitoring,
and biomarker discovery.”

15. MARCH 16, 2016
19CONNECTED HEALTH
Epilepsy is a frightening disease for
the 2.2 million people in the US who
suffer from its seizures, as it is for
their loved ones. The unpredictabil-
ity of seizures lingers in their aware-
ness at all times. Will I have a seizure
during the high school musical? Is
it safe to ski? Will my child wake up
tomorrow?
Each year, one out of 1,000 people
with epilepsy die of SUDEP—the sud-
den unexpected death of someone
with epilepsy. In the US more people
die of SUDEP, says Rosalind Picard,
chief scientist of start-up Empatica
Inc., than of SIDS (sudden infant death
syndrome) or a house fire. “Everyone
knows to place a baby on his back
during sleep to prevent SIDS, or to in-
stall a smoke detector in their house,
but most people have never heard of
SUDEP, and there is no warning sys-
tem.” CEO Matteo Lai says that at a
meeting of Partners Against Mortal-
ity in Epilepsy he met the parents of
children who had died unexpectedly.
When he left, he thought, “We can’t
send people with this type of epilepsy
home without a monitor.”
Developing a wearable technol-
ogy that predicts and sends alerts for
SUDEP is the ultimate (and ambitious)
goal of Empatica, but the company is
taking a phased approach to that end.
For the first phase, it is selling a wrist
watch called Embrace, which tracks a
number of physiological signals to help
patients and their caregivers under-
stand their own patterns of seizures.
It is also selling a clinical-grade device,
the E4 sensor, for the collection of rel-
evant data from epilepsy patients for
the purpose of research. These new de-
vices are important because of the het-
erogeneity of epilepsy patients. Picard
hopes that data gathered in this phase
will inform the development of future
epilepsy monitors and therapies.
Empatica brings together two in-
dependent research efforts. In 2012,
Picard licensed technology from the
Massachusetts Institute of Technol-
ogy’s Media Lab for monitoring the
response of the autonomic nervous
system. She was initially developing
a monitoring system for people with
autism, who might be nonverbal or
otherwise unable to speak about what
they were feeling. Along the way, she
discovered that seizures could also be
detected with the platform. Empatica
SRL in Milan, Italy, was doing similar
work, but in the consumer space, and
the two entities combined to form Em-
patica Inc. in 2013.
Many companies are developing
wearable epilepsy monitors to alert
caregivers by measuring the repeti-
tive shaking motions of patients during
seizures (for example Emfit Ltd. and
Smart Monitor). Empatica’s Embrace
watch also has a motion-detection
algorithm, but it additionally offers a
sensor capable of identifying the au-
tonomic signature of a seizure, which
leads to greater accuracy in detecting
convulsive seizures, according to stud-
ies conducted with research partners
at Children’s Hospital Boston, Brigham
and Women’s Hospital, and other insti-
tutes. (See “Convulsive Seizure Detec-
Epilepsy:
Predictive Capabilities Save Lives, Empower Patients
EMPATICA INC.
Cambridge, MA
Founded: 2013
Sector: Neurological: Epilepsy
Contact: Rosalind Picard, ScD,
Chief Scientist, rp@empatica.com
Founders: Rosalind Picard, ScD,
Director of Affective Computing
Research and faculty Chair
of MIT's Mind+Hand+Heart
initiative, MIT Media Lab, Matteo
Lai, CEO, who trained as an
architect and has worked in
Design and IT; Simone Tognetti, a
software engineer with expertise
in artificial intelligence, affective
computing and human-computer
interaction; and Maurizio
Garbarino, a software engineer
with expertise in affective
computing
Funding to date: $2 million
How the company gets paid:
Initially, selling a consumer
device for vital signs and activity
tracking for $199 and a monthly
fee for an alert system; ultimate
goal is FDA approval for epilepsy
claims and reimbursement

16. THE MEDTECH STRATEGIST © 2016 Innovation In Medtech, LLC. All rights reserved.
20 CONNECTED HEALTH
tion Using a Wrist-Worn Electrodermal
and Accelerometry Biosensor,” Ming-
Zher Poh, et al, Epilepsia, 53(5):e93-
e97, 2012.)
Empatica’s electrodermal activity
(EDA) sensor is an indicator of sympa-
thetic nervous system arousal, that is,
physiological stress responses. Sweat
glands are activated by the sympa-
thetic nervous system in response to
psychological or physiological stress,
which in turn affects skin resistance,
causing electrical changes that can be
measured. Empatica believes that its
EDA sensor might, for some events, be
a more sensitive seizure detector than
the gold standard electroencephalo-
gram (EEG). In one study, Empatica’s
system picked up likely seizures from
deep in the brain that were not de-
tected by EEG electrodes placed on
the scalp.
The company’s studies have shown
that the most dangerous kinds of sei-
zures elicit the biggest autonomic re-
sponse from the sensor, according to
Picard, and the second most danger-
ous type gets the second biggest re-
sponse, which hints at the potential of
the technology to one day help prevent
SUDEP. There are many different kinds
of seizures, but SUDEP, Picard notes, is
most often associated with generalized
tonic-clonic seizures, which last for less
than five minutes, during which time
all the muscles stiffen and the patient
experiences convulsive movements.
Most patients who experience SUDEP
do so during sleep or when they are
alone. Picard says that studies suggest
patients stop breathing during these
seizures and that simply touching them
and saying their name aloud may cause
them to recommence breathing. The
company ultimately hopes to be able
to alert caregivers so they can inter-
vene during or shortly after the seizure,
which might prevent a possible SUDEP.
Seizure detection is a medical appli-
cation requiring FDA approval, and the
company is preparing for that approv-
al. It has applied for FDA 510(k) clear-
ance of its E4 clinical-grade sensor for
research purposes. (NIESM Pty Ltd. in
Australia is also developing a wearable
clinical-grade epilepsy monitor for re-
search and clinical purposes.)
For now though, the company wants
to help patients the best way it can. It
describes the Embrace as a “gorgeous
watch designed to save lives,” accord-
ing to the firm’s website, where pa-
tients can purchase the watch for $199
(see Figure 6). That’s a consumer-tar-
geted message and a price point that’s
in line with other consumer products,
for example, the Fitbit Blaze, which
tracks heart rate, sleep, exercise, and
other activity, and displays cell phone
calls and texts.
Embrace, says Picard, will track mo-
tion, temperature, sleep, physical ac-
tivity, and autonomic stress and will
also include a smart phone app to log
different events that the patient is in-
terested in measuring so that they can
ultimately be correlated with physi-
ological signs. The company has part-
nered with the Epilepsy Foundation,
which will help people who can’t af-
ford Embrace get access to the new
technology. FDA-clearance and phy-
sician buy-in will be necessary, how-
ever, to provide the technology to the
broadest swath of patients in need.
In the short-term, the company is po-
sitioning Embrace as a tool that helps
people recognize their patterns of
physiological stress. “Potential triggers
for your seizures might include hor-
mones, stress, lack of sleep, alcohol, or
the fact that your Aunt Sarah is visiting.
There is so much heterogeneity, but
we would like to enable people to find
patterns that precede their seizures.”
As such, Embrace will give people the
information they need to guide their
daily decisions. “The last time my child
had a sleep pattern like that, she had
a seizure the next day. Maybe we’ll
postpone that shopping trip.” But the
information it gathers may ultimately
increase the scientific understanding of
epilepsy and how to treat it.
Figure 6
The Embrace Watch from Empatica
Source: Empatica Inc.

17. Editors-in-Chief:
David Cassak &
Stephen Levin
Mobile device-friendly
digital magazine format –
dazzling display on your
computer, mobile phone
or tablet
Insights that fuel your
company’s growth
Read by senior life science
executives, investors,
physicians, entrepreneurs,
and many others with
a stake in the evolving
device space
Superior content backed
by a writing team with
unparalleled industry
experience
A level of coverage of
the device marketplace
broader and deeper than
any other source
Reliable, In-Depth News and Analysis
for Medical Device Decision Makers
www.InnovationInMedtech.com • www.medtechstrategist.com
Proud Provider of the “So What” to the Medical Device Industry!
MULTIPLE USERS AND GLOBAL LICENSES ARE AVAILABLE – for details, please contact:
Kristy Kennedy, 480-985-9512 • k.kennedy@medtechinno.com
MEDTECHSTRATEGIST.COM
See page 5
FEBRUARY 9, 2016
Vol.3, No.2
MARKET TRACK
TAVR Market
Shares
EMEA/
ROW 2015
Published twice monthly by Innovation In Medtech,llc
BUSINESS MODELS
Fresenius Medical —
Making an IntegratedProduct/Service Model
WORK IN MEDTECH
David Cassak, 24
START-UPS TO WATCH
SPIROMETRIX:
A Novel Biometric Helps
Personalize Asthma Care
Mary Stuart, 44
INDUSTRY OUTLOOK
TECHNOLOGIES
TO WATCH in 2016The MedTech Strategist Editorial Team, 4
MOLECULAR DIAGNOSTICS
A BOOST for
the Nascent Molecular
POCT Market
Wendy Diller, 38
 XCR Diagnostics Sets its Sightson First Hand-Held CLIA-Waived
Molecular POCT Device, 41
 Transcatheter Valve Market: Full Steam Ahead Leadless Pacing May Spur CRM Growth
 Surgical Robots Move to Center Stage
 Bringing Diabetes into the Digital World
 New Entrants to Watch in the Artificial Pancreas Space Neurostimulation Market Enters Expansion Phase Diagnostics: Clinical Genomics, Microbiology,Reimbursement at the Forefront
 Navigation, Minimally Invasive Surgical Tools DriveOrtho/Spine Innovation
 Wearables: Wellness and Medicine Collide
Note: EMEA/ROW = Europe, Middle East, Africa/Rest of WorldSource: Matthew Taylor, Barclays
TAVR Market Shares, EMEA/ROW 2015
Figure 1
Edwards
51%Medtronic
34%
BSX
6%
STJ
1%
Other
8%
MEDTECH INVESTING
HEALTHQUEST CAPITAL:
Launching a New Medtech Fund Today
David Cassak, 22
SOCIAL MEDIA
WHO’S FOLLOWING
Medtech Companies?
David Cassak, 32
EXECUTIVE INTERVIEW
THE STATE OF THE ISRAELI
MEDTECH INDUSTRY
An Insiders’ View
Stephen Levin, 4
NASS Round Up:
INNOVATION in an Era
of Healthcare Reform
Wendy Diller, 16
DIGITAL HEALTH
TRUTAG
TECHNOLOGIES:
Digital Health Meets
the Internet of Things
Mary Stuart, 28
MEDTECHSTRATEGIST.COM
See page 18
Published twice monthly by Innovation In Medtech,llc
DECEMBER 4, 2015
Vol. 2, No. 21
Published twice monthly by Innovation In Medtech,llc
START-UPS TO WATCH
EMPERRA E-HEALTH
TECHNOLOGIES:
Combining Smart
Devices and Digital Data
Management to Enable
Better Diabetes Outcomes
Mary Thompson, 34
START-UPS TO WATCH
THERMATOME:
An Alternative to
Radiation Therapy for Breast
Cancer Patients
Wendy Diller, 36
MARKET TRACK
$0
$500
$1,000
$1,500
$2,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
$Millions
SCS Market
Others Medtronic Boston Scientific St. Jude Nevro
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
SCS Market
Boston Scientific Medtronic St. Jude Nevro Others
GROWTH OF GLOBAL
SPINAL CORD STIMULATION
($M)
NEUROSTIMULATION
$1495
Annual
Subscription
Offer –
$500 Off!
TWICE-
MONTHLY
ONLINE
AND PDF
PUBLICATION