NEW YORK (360Dx) – Even as consumer markets for wearable devices are facing headwinds, activities are heating up in applications that provide diagnostic results such as cardiac health signals. Although the future may appear promising, emerging companies developing wearable diagnostics still have plenty to do to achieve a viable level of market adoption.
One such company, New York-based Nanowear, became one of a few companies developing wearable diagnostic monitoring devices that recently received regulatory clearances from the US Food and Drug Administration. Nanowear's cloth-based diagnostic tool incorporates proprietary plastic nanofilaments into an undergarment to monitor heart signals and help prevent cardiac events, such as arrhythmia.
In December, the firm received 510(k) clearance from the US Food and Drug Administration for its first product, the SimplECG medical-grade cardiac vest, which collects electrocardiogram, heart rate, and respiratory rate data from nanosensors embedded in the garment and transfers it to a web-based portal for review by a physician.
As part of its go-to-market strategy, the company is looking to collaborate with an established medical device company and engage with a firm that has strong and suitable manufacturing capabilities, Nanowear's Head of Finance and Strategy Reggie Hall said in an interview.
The firm's first product, developed over the past 14 months, senses low-impedance electrical, biometric, and biochemical signals from the skin without the need for conductive gels, adhesives, or skin preparations used for standard cardiac testing. Millions of sensor signals indicative of heart health are emitted from a 1 inch by 1 inch square piece of the cloth, and the signals are aggregated to provide measurements.
In the next year or so, the company plans to take the product to market for diagnosing cardiac arrhythmias, and it will simultaneously develop the next product in its pipeline, a cloth-based congestive heart failure monitor, Hall said. More long term, the firm has plans to develop products for additional healthcare applications, such as monitoring of sleep, epilepsy, and traumatic brain injury, and then focus on exploring consumer product opportunities.
Hall said that he believes most of the initial hype around wearable technologies may have worn off, resulting in headwinds as consumer wearable firms try to market their devices. However, better adoption in healthcare applications could mitigate these challenges.
"On the medical side, the prevalence of diabetes and heart disease creates a need for wearable solutions that allow monitoring outside of the hospital," Hall said. "We're seeing a push towards outcomes-based medicine that means keeping people out of the hospital and keeping costs down, and that will drive innovation in wearables and smart textiles over the next two to three years."
Wearables headwinds
The key to success in this market is to provide accurate and actionable insights, Hall said, adding that he believed that this is why companies in the consumer market have stumbled in recent years. "After people purchase them, they tend to put them on the shelf because they're not providing diagnostic value," he added.
The wearables market grew just over 3 percent in the third quarter of 2016, led by demand for fitness bands, which beat sales of smartwatches, according to industry tracker IDC.
Roughly 23 million wearables were shipped in Q3. Signaling softness in the consumer market that echoed Hall's concerns, Apple Watch shipments fell more than 70 percent year-over-year during the quarter.
IDC research manager Ramon Llamas reported that he expected users' tastes and needs would change and create opportunity for multifunctional smart wearables. However, he noted that the industry would need "applications that go beyond health and fitness and into personal and professional productivity."
Hall said that he expects diagnostic tools, including Nanowear's congestive heart failure monitor, will emerge as the next wave of adopted wearables and then later drive adoption in other market applications. He expects to see more pronounced adoption within the next 18 months, he said.
New entrants
In August, FDA made it easier for consumer wearables companies to continue producing fitness trackers when it released a final guidance document that stated it would not regulate products intended to promote "general wellness," which it considers low-risk devices.
But for companies producing wearables that provide diagnostic conclusions, regulatory clearance is required. Still, the number of market entrants with an interest in wearable diagnostic applications has been on the upswing.
In addition to Nanowear, in October, Biotricity said that it had received FDA 510(k) clearance for Bioflux software, a key component of a mobile cardiac monitoring device that it's developing.
Biotricity CEO Waqaas Al-Siddiq noted that receiving 510(k) clearance was a step toward the firm's goal of enabling physicians to remotely monitor and diagnose patients with cardiovascular disease and coronary heart disease.
"While wrist-worn fitness devices are incredibly popular and valuable for the fitness and lifestyle markets, they are not applicable for chronic patients," Al-Siddiq said in a statement. "The reality is they are not cleared by the FDA, and we believe some of them may not be capable of reliably measuring heart rates."
Also in October, iRhythm Technologies, which combines wearable biosensing with cloud-based data analytics and machine learning in a system that diagnoses cardiac arrhythmias, raised around $111 million in its initial public offering.
The company reported revenue of $16.8 million in the third quarter of 2016, an increase of 80 percent over the same period of the prior year. Meanwhile, it narrowed its net loss to $4.1 million in Q3 2016 from a net loss of $5.7 million in the year-ago period.
Thus far, the firm provided its service to more than 500,000 patients, and it has received US payor coverage to the tune of around 290 million patients, iRhythm CEO Kevin King said in a statement.
In December, Fitbit — a trailblazer in the consumer wearables sector that now describes itself as a "leader in the connected health and fitness market" — became a partner with Medtronic as part of an initiative that integrates health and activity tracking for diabetes patients, and provides access to that information to physicians and care teams.
Fitbit saw its stock price fall around 74 percent from January 2016 to December 2016. However, the company has announced an objective to move into diagnostics that might expand its markets and customer base.
“We believe the integration of wearable technology with professional diagnostic tools can provide a more accurate and actionable view of a patient’s physical activity,” Fitbit's Vice President of Digital Health, Adam Pellegrini, said in a statement.
Nanowear's Hall said that the closest competitor to his company's SimplECG cardiac vest may be a heart failure monitoring device produced by St. Jude Medical, which is being acquired by Abbott Laboratories. In 2014, St. Jude received FDA approval for the CardioMEMS heart failure monitor. The firm said that the device — which uses a wireless monitoring sensor that's implanted in the pulmonary artery during a minimally invasive procedure — has shown itself to be effective in reducing hospital admissions.
A procedure called right-heart catheterization, which measures pulmonary-artery pressure, is the standard-of-care practice for managing patients who have been hospitalized and appear to have worsening symptoms.
The CardioMEMS HF System allows patients to transmit information from their homes to their healthcare providers, allowing for personalized and proactive management to reduce the likelihood of hospitalization, St. Jude said.
Nanowear should be able to compete effectively, Hall said, because it doesn't require an invasive procedure or the associated expense, and therefore the firm's wearable diagnostic device would be affordable to a far broader patient population.
Because the vest uses multiple signal channels it gives a more comprehensive view of heart health than is available from competing single-channel cardiac monitors, he added.
However, the company's route to commercialization has only just begun with receipt of FDA clearance. Nanowear's go-to-market strategy will require collaborating with established companies and will likely require licensing and distribution agreements or codevelopment, Hall said.
The company needs a commercial partner that would provide value in helping it scale up manufacturing, and it would also look to establish a tie-up with incumbent medical device companies that have entrenched relationships and established sales channels, and that may be seeking innovative solutions related to sensors and monitoring.
The market appears to be of adequate size to make it interesting for larger players, he said, adding that around $30 billion per year is spent on congestive heart failure management.
The addressable market within healthcare alone for cardiac rhythm monitoring presents a multibillion-dollar opportunity, and that will expand when opportunities open in consumer, industrial, and military applications, he said.