Transcript
0:03 Eugene Borukhovich
Welcome to the Digital Therapeutics Edition of Digital Health Today, and I’m your host Eugene Borukhovich.
In the last episode, I spoke with Elena Mustatea, CEO and co-founder of Bold Health. Her background in finance, venture capital, and being an IBS patient herself, led her to start Bold Health.
In this episode, I was so glad to meet Ciara Clancy, CEO and founder of Beats Medical. Beats, in their own words, aims to empower people with neurological and neurodevelopmental conditions through digital therapeutics.
But before we dive in, I want to thank my journalistic partner of this podcast, Brian Dolan, for pointing me towards Ciara, who I never met nor spoken to before until this podcast recording. Ciara immediately struck me as one of those amazing entrepreneurs who focus less on the spotlight but more on execution and delivering patient value and outcomes. And now, we jump to my conversation with Ciara.
Welcome, and I’m here with Ciara Clancy, CEO and founder of Beats Medical. Ciara, why don’t you tell us a little bit about your background and who you are? And then we’ll dive into more questions for you.
1:19 Ciara Clancy
Yeah, hi, Eugene. Absolutely. My name is Ciara Clancy. I’m a physiotherapist originally by trade, and then did a PhD looking at the predictors of outcomes of neurosurgery. I founded Beats Medical in 2012 to take existing, clinically proven therapies– allied health therapy, specifically– out of hospitals and into homes through technology.
1:40 Eugene Borukhovich
Amazing. And at the time, what was the passion? What made you create Beats Medical, what was the big trigger? I talk about this in health and health care, and a lot of the entrepreneurs [see] a real need out there, and that’s why they create companies, versus widgets and gadgets and other things. So what was the trigger to start it in 2012?
2:02 Ciara Clancy
I remember the exact moment I actually decided to found Beats Medical. I was working as a physiotherapist in a hospital, and my next patient, a person with Parkinson’s disease, was 20 minutes late. I went out to find him stock frozen at the main entrance of the hospital, unable to move– this is a common symptom in Parkinson’s disease. He was coming into me for therapy called metronome therapy. It’s like a piece or soundwaves that help signal normal movement and help these patients overcome this freezing issue and be able to walk with ease. The problem was, it was only available in hospitals, as it needed to be individually prescribed. Of course, he needed this at home, not just in the hospitals. And despite 50 years of the evidence behind this (the most recent systematic review published in Nature) on the efficacy of [it], the ability to have it at home just wasn’t there.
So really, it was born out of, “I need to do something.” You look left and right– is anyone else gonna do this? [I] realized that I didn’t want to go 20 years into my career and not try and see if we could make this happen.
3:00 Eugene Borukhovich
Yeah, taking the entrepreneurial leap is always challenging, but I think practicing in the front lines gave you the trigger. Unlike many other companies that are in the “digital health” space, you’ve raised almost no VC money– at least according to PitchBook. Yes, I do a little bit of homework here. You cancelled a round in 2017, which to me, means that you’re raising money, but from actual customers. I joke that it’s actually tougher than raising it from VCs. Can you talk about this a little bit? How you guys got cracking, and the history from 2012 until now?
3:45 Ciara Clancy
Absolutely. I think users are everything, in the sense that they will make you accountable for every part of your product. They will ask questions about what’s in it for them, and how is this going to help them. We didn’t initially plan to go B2C; we thought we would be a B2B business. When we made the breakthrough and developed the technology after two years, you see, it was instantaneous. People with Parkinson’s struggle to walk– then you got the algorithms, and they could walk with ease. So we knew we’d cracked it.
We were doing our research at the time, and through that phase, we said, okay, we’ll go to hospitals. Of course, they’ll bite our arm off for this! But this was back before the term digital therapeutics existed. What we did didn’t look like a pill, it didn’t look like a therapy, it didn’t look like how you treat Parkinson’s disease. But the users in our clinical trial actually said, “please don’t make us wait. We’re willing to pay for this now.” We did some market research, and what a price point would look like, and we released direct-to-consumer. It very much formed part of our bread and butter.
As the years went on, we looked at different strategies for scale and for growth as well. When you talk [about[] different funding strategies, there’s three things that I suppose I’ve learned from founding a digital therapeutic company: that is, the value of walking away from things that aren’t right; the importance of always knowing what you’re walking towards; and the key point is, is walking the journey with the right partners, and the right funding, and the right shareholders.
I think for us in that scenario, it wasn’t long after that round that we attained a project with the European Commission, a multi-million Euro project, to work for the greater good of Europe and healthcare through the Horizon 2020 Program. So really, it’s about finding the path and the way through that allows for sustainability. B2C was a huge part of that, but our latest model over the last two years, which was the plan from the beginning, is we do a lot more B2B now, as a B2B-first business. It’s quite a big area around growth for us, and it’s the majority of our focus.
But what I will say is that B2C keeps us accountable for the best and the highest quality of products. Because if you are closing these pharma contracts, you’ve got your health professionals prescribing it, but ultimately, these are recurring revenue projects. You need to make sure that users are enjoying it, see the value in it, [and] are using it over time. Digital therapeutics will be so accountable for the adherence and the value of the products that they bring to patients– both from a clinical outcomes perspective, but also (as I’ve learned as a physio), the best therapy program in the world, if you don’t do it, won’t deliver value. I can spend all the time in the world giving you the best exercises for a particular problem. But if you come back next week, and you haven’t done them, I’ve really not done you a whole lot of good.
6:27 Eugene Borukhovich
So your original hypothesis was you were going to go to B2B. I love [that] the patients in the clinical trial were asking you, “don’t make me wait.” So the hypothesis changed very quickly to direct to consumer, and then as you had growth, you’re now focusing on additional channels– more B2B, while still preserving your B2C. Is that correct?
6:29 Ciara Clancy
Yeah, absolutely. We have confidence, we work with a client that know[s] that we can deliver that value to the end user, which is ultimately what I suppose the end goal of this is. To change lives with it.
7:10 Eugene Borukhovich
Can you talk a little bit about the pricing? To be frank, I did not look that up, the direct-to-consumer pricing for this. And I know you’ve expanded your product line, so I want to talk more about that as well. But let’s start with the pricing.
7:25 Ciara Clancy
Yeah, so in the B2C, it came down to market research. As one user said, our product is a Euro a day, or close to $1 a day. As they said, “It’s the cost of a cup of coffee, and it helps me walk to the shop to get that cup of coffee.” So there are some price comparisons there. There is a 14-day free trial with our service, and with that, users see the benefit and have the option of converting. We see about 70% of those who get started and use it see the benefit and will convert to fully paying users. But we really want them to see that value. That’s really, really important.
We also have a couple of models in B2C. Our product is reimbursed in Australia and in Ireland by a private health insurer. That’s, to an extent, still an element of your B2C because the end user is signing up there with the insurer in the middle. The major piece now that we work with is pharmaceutical companies, to help them deliver their Parkinson’s [inaudible], their dyspraxia with a product in pediatrics, for their neurological or central nervous system condition. So we have a platform approach to central nervous system conditions. If the disease has issues with speech, walking, or fine motor movement (movement of the hands) or psychology, we have something that can be adapted to help and be deployed fairly rapidly.
8:48 Eugene Borukhovich
It’s time for a question from my journalistic partner on this podcast, Brian Dolan, who is the founder of Exits & Outcomes, and as I like to call him, the digital health detective. Let’s see what question Brian has for our guest today.
9:03 Brian Dolan
Okay, here’s my question. From what I can tell, Beats is mostly monetized via in-app purchases, and presumably, those are paid by the person using the app. How do you drive awareness of Beats Medical, so that people know to download it and make those in-app purchases? I see you’re doing some Facebook marketing right now. Can you talk a little bit about how you target people using social media ads?
9:27 Ciara Clancy
Thanks, Brian. It’s a great question. As I said, what makes up the majority of our business is actually more the partnerships within the pharma industry now, but the B2C is still an important bread and butter piece.
I suppose the biggest area that we see in reaching our customers is actually the power of the end user. So yes, we can talk about social media, but even reimbursement in Australia was spearheaded by a number of clinicians and their patients. We didn’t have a presence there. Same with some of endorsements from Europe’s largest Parkinson’s charities and some of those advocacy groups around the world. Even the pediatric ones and dyspraxia, these really come from that value add, and then these users start to tell more users about it.
I would say the strongest method for more users signing up is hearing from other users, and likewise, those users telling their clinician. Getting a two-minute meeting with a neurologist who has a two-year waiting list is hard. They’re seeing our users quite frequently, and they tend to be quite proud of the impact it’s had and like to showcase that, which then kind of becomes self-fulfilling in a way. So, in a word, what is the strategy for them to find out about it? It’s making sure that [the] individual user is empowered, and they are empowered to tell others about it.
10:45 Eugene Borukhovich
The power of virality of something that actually works for the end users is powerful. So we started talking about your Parkinson’s product, but I’ve also noticed you’ve expanded to two more. Maybe you can talk about a) what they are and b) what led you to expand out to those two. I think the children’s product is super interesting.
11:11 Ciara Clancy
When we first began this digital therapeutics company, and before that name existed, we understood that neuropharmaceutical drugs have one of the highest failure rates. I know you’ve spoken in previous podcasts about this, we know that CNS disorders are notoriously difficult to treat. We have a huge amount of pharma companies who unfortunately turned away from those clinical trials in those high-risk areas. But when you actually look at this market as a whole, a lot of this is down to the fact that many CNS conditions are umbrella terms for heterogeneous groups; groups that are very, very different from each other within the same umbrella name. By understanding those subgroups, we can understand more as to where therapies can be effective. So we really wanted to make sure that in building this digital therapeutic that we enhance that impact to the next condition.
We started with Parkinson’s in the sense that Parkinson’s differs not just from person to person, but within each person, from hour to hour, minute to minute. They can present very differently throughout the day. By developing that understanding of Parkinson’s disease, we’re able to deploy our core technology to a new neurological condition [inaudible] pediatric, which was a condition called developmental coordination disorder, or dyspraxia in children, enabling them to work on their fine motor hand movements, gross motor walking, and balance, coordination, and speech, and deliver these therapies at home. It was a really unmet need.
Again, as the market really evolved– and I would say, in the last two years, we saw the shift of the pharmaceutical industry embracing this as a “need to have,” no longer a “nice to have”– we’ve seen a huge emergence in not only the mass market drug area in CNS but also rare genetic disorders. We’re doing a lot more there than maybe we originally expected. But with 80% of central nervous system conditions, experiencing symptoms with speech, fine motor, and gross motor issues– despite the medication– you can understand that there is a need to go beyond the pill. There’s a need to treat more than just the primary symptoms, and to meet these patients where they’re at.
13:14 Eugene Borukhovich
Maybe talk a little bit about Wonders Cape. Sounds intriguing. The way I looked at it was as a well-being and relaxation app. Everybody I talked to [feels] just because you have different comorbidities, mental health spreads across; you don’t need to be sick with a different disease. Talk about Wonders Cape. Is it something together with your other products? What were you thinking about it?
13:40 Ciara Clancy
Yeah, Wonders Cape was our response of our core platform to a need. COVID-19 did introduce stresses and challenges on children in a way that we never expected or seen before. As I mentioned, we have these four core components of our technology: fine motor, gross motor, speech, and this wellbeing aspect, or from an [inaudible] therapy perspective, psychology. That module is available to us. We’ve looked at it from [the angle of] deployment into children with chronic diseases, who may be under stress or challenges, and may have a rare genetic disorder and have those issues. We rapidly repurpose that module for the general population of children in COVID-19 experiencing stress, as part of the pilot.
We’ve done some existing research with the Institute of Design and Technology Engineering in Ireland, and we had some preliminary evidence there and decided to release a pilot in relation to an unmet need. I guess what this demonstrates is, first, the impact; the ability for the product, the core technology, to impact a new condition very rapidly. But secondary to that, I think what it shows is that we can take these modules and respond to these needs immediately and put something out there that matters. For us, it’s very much a testbed to when, for example, rare genetic disorder companies come to us; just like we can respond rapidly to COVID-19 as a social responsibility piece, we can rapidly respond to their needs and release something for them.
15:03 Eugene Borukhovich
We joke around on the other podcast, The Shot, [that] the goal here is to get the masses to listen and understand digital therapeutics. Maybe you can walk us through it. Let’s pick the Parkinson’s product. What is that experience like for Parkinson’s patients? How do I find it? What is it? How do I use it? My end goal is to manage my Parkinson’s. So walk us through that experience.
15:41 Ciara Clancy
Essentially, we turn your phone into a medical device. We’re independently certified as an ISO 13485 compliance, which is your medical device quality standards. But essentially, you’re receiving that through your phone as a piece of software.
Immediately, what the user can do daily is daily assessments of their walking and get tailored therapy for their walking, which is this beat or soundwave, which helps cue and control normal movement. Where that signal to move is impaired in a person with Parkinson’s disease, we give them back that signal through the phone. It’s as if to say “step, step, step.” In Parkinson’s disease, that internal signal is gone, so we give that back.
Second piece is they do assessments on their speech. People with Parkinson’s can think they’re shouting when they’re actually speaking at a normal volume and reduce their volume over time. So they get live visual feedback on the volume of their voice, being able to adjust that in real time. Same with fine motor. They can have issues with micrography– small handwriting– and our therapies allow them to work on that, both from being able to understand their needs and develop on that.
This is the same when it comes to developmental coordination disorder, except this condition is not degenerative, so there needs to be more challenges on a daily basis to advance. Whereas with Parkinson’s, it needs to scale back and scale forward, depending on their performance in that day, in that hour. This is where our core platform technology is really, really sophisticated, and I suppose very clever in its ability to do that. It’s why we’ve been able to deploy it in anything from a very complicated condition like Parkinson’s disease, to other conditions that might not require so much tailoring. But it’s so important that it is tailored to the person with the central nervous system condition, as opposed to just the condition.
17:21 Eugene Borukhovich
You alluded before we started recording that you’ve listened to some of the DTx podcast. And you’ll also know that Brian talks about prescription digital therapeutic[s], and I bring in the component of [digital therapeutics] “versus” disease management. I don’t think it’s “versus.” My first question is you’re not prescription, right? You don’t need to be prescribed?
17:49 Ciara Clancy
Some of our products enter into the prescription market, for sure. This is more in the other areas; our main primary business model now is more on that side.
But what I will say is that I agree with you; I don’t think it’s “versus.” I think the reality of prescription digital therapeutics is so important. That at the point of care, you’re given a solution along with your pill, and it helps manage the symptoms that persist alongside it– working complementar[il]y in that sense. But I do think that in the sense of disease management 2.0, as you call it, you have to look at the fact that our patients are no longer passive recipients of care. Even the word “patient,” it’s just not the right word. “Patient” infers certain things around being patient and waiting for your care. They are more partners in care.
I think digital therapeutics, true prescription digital therapeutics, and chronic disease management therapies put the user at the center as a partner in their care. And having those clinicians to direct them to the right solutions is so vital. Likewise, when we know that 99% of chronic disease care really takes place in the home (you hope that they’re not in the acute care setting too much, unless something has really gone wrong), that’s where we need to give them the tools to take control in their hands. In certain areas we need prescription, and in certain areas, there [are] some consumer plays that are happening. But with the emergence of further reimbursement in the market, I think we are going to continue to see prescription digital therapeutics winning out. This ability for a user to attain care when they need it, if the risk is managed, is important too.
19:23 Eugene Borukhovich
I know you guys are now working with a couple of pharma companies. I’d love to understand your decision point, because you’ve had [success with] direct-to-consumer and through insurance reimbursements in other countries. Why pharma? Let’s start there, and then I’ll have a follow on question to that.
19:44 Ciara Clancy
For us, it’s really about impact. We’re looking more at the mass market drug space, but we certainly have some really exciting stuff in the rare genetic disorder space. So when you do look at B2C, it is a slightly longer path and that impact when we know the way healthcare is.
We believe [in] the value in partnering for the greater good. We believe that there are things to be learned from pharma, just like there are things to be learned from [inaudible] and our B2B, B2C learnings. The fact that our users put their hand in their pocket to pay for our products– and many are still with us after five years– demonstrates the value creation that was there. But access to those people through partnerships, I think is the key to much larger success.
When you look at anything like using digital therapeutics to enhance outcomes, or even maybe identify new drug pathways, for treatment of these conditions, it really rounds off the circle in ultimately creating a better life for all. We aim and we plan into the [next] 20, 30, 40 years– that’s how we plan our business model. If you look at addressing a billion people worldwide with these central nervous conditions, that will involve partnering, but it will also involve looking at what the output there is in 20-30 years.
So looking to digital biomarkers, what does it mean when people engage with your product because they get great outcomes? What does it mean for the future? I always find it funny [that] when we first brought that walking therapy, it was our users that said, “We want more for our speech, we want something for hand movement.” We gave them that they said, “That’s great, any chance of a cure?” Your users will always push you to go further. Having that finger on the pulse, while working with pharma, helps us create products for pharma that we know are truly there to change your life.
If you look at the Parkinson’s product, we almost see it as much like a drug as it is a walking stick. You pick up your walking stick every day to make your walking a little bit easier. It’s so ingrained in your life, that it is something that just incrementally makes that life a little bit better. That’s really where we sit within this– trying to give them the tools to take control at home.
21:46 Eugene Borukhovich
It’s amazing to hear from an entrepreneur. It’s a bold vision! And that you plan the [trajectory of the] business [over] 20, 30, 40 years. You guys are a great example of listening to the end health consumers (I also don’t like the word patient). [You] listen to the algorithm, design the products that they love, and help them every minute throughout the day. You get to know their experiences. Potentially the pill becomes part of that experience, but on the other side there’s pharma as an industry. Do you see that merging in some way? At the end of the day, you are digital therapy today. We had some other guests that will be aired and they will say maybe DTx needs to disappear as a term; it’s just a therapy. On that spectrum– DTx companies swallowing the pill inside, or the pill companies swallowing the DTx inside– your two cents?
22:51 Ciara Clancy
This is a really interesting discussion. I think we had it a few years ago– will it be absorbed by the industry, or will it be standing on its own two feet?
I think we’ve seen a huge value in non-addressed disease areas. One of them is development coordination disorders, an unmedicated condition. One in 10 children are affected by it, and all of these children need early interventions. So being able to release products in areas that are previously untreated, and looking at clinical outcomes like walking, speech quality, all of these physical, actual clinical outcomes to those interventions, I think it’s very powerful.
In a sense, I’d like to see digital therapeutics stand on its own two feet, which involves sustainable business models [and] clever pricing; we cannot afford to make the same mistakes of the tech industry. We’re neither pharma and we’re neither tech. But if we price, say, the Uber of digital therapeutics, it will erode the market in the sense of the quality and sustainability of those products that have to be put out there on the market. I think we need to tread very cautiously over the next five to 10 years to make sure that we are building these models that are, again, sustainable and scalable, to the extent that quality is maintained across the field. In that way, not being seen as an app, being seen more as a medical device, but without some of the levels and timelines that you need for certain clinical trials for drugs– in the middle of that is a very attractive area to sit.
So in answer to your question, I think we should be close partners and friends. But I think that digital therapeutics will stand very well to be good at what they’re good at, and pharma are good at what they’re good at. Working together is going to lead to better outcomes for all, rather than necessarily an absorption model where it just moves into the pharma industry completely and gets absorbed by it (so that “the Pfizer” of digital therapeutics is on the horizon, if you will).
24:40 Eugene Borukhovich
Yeah. We’ve had some guests that were “the Something” of digital therapeutics. There’s different approaches to all of this, and that’s the beauty of entrepreneurship. So what’s next for Beats Medical? You already alluded to a couple of things, maybe just a summary– what’s next for you guys?
25:00 Ciara Clancy
We have some really exciting things on the horizon, particularly the output of this partnership with pharma, the learnings that we’ve taken over the last eight years. Learning from these major partners and the learnings that they’ve taken from the last 100 years. Some great things are coming down the track from that, and we’re really excited about that.
Ultimately, the goal is to continue to double down on central nervous system conditions and see how we can not only improve them in the short term, but understand them in the long term. While you begin to try and understand these conditions, you need to create great user experience, great clinical outcomes. As the users say, “What’s in it for us? Are you collecting data for the sake of data? Because it matters what you’re doing for me, so keep bringing that clinical outcome.” Over time that may deliver an understanding that maybe our patients are right; we laughed at the time, but maybe that request for a cure…I certainly don’t think it’s in the next five years, but 10-20 years [with] the emergence of digital biomarkers, they may well be pushing us in the right direction. Who knows what comes from that data and understanding of really complex umbrella terms for conditions that are so different?
26:10 Eugene Borukhovich
Yeah, it’s definitely a tough space and bold of you to get into it. Lastly, we started with you [and] would love to leave the listeners with what gets you up in the morning. What’s your why?
26:24 Ciara Clancy
One of the things that we try and keep– not just myself, but the whole team– connected to is the end user, whether we’re developing a new product or existing products. Last week, we had a user join our team via video conference. He said, “I have a degenerative condition, which means I get worse over time, which means today is the best day I will have.” For me, it’s about how do we make today better. Waking up each morning and sitting there and saying, how do I make that one person’s day better? If we reach those billion users, it’s about that one person’s amazing day multiplied by a billion, not an abstract number. That little incremental change that you can make every day, I think it’s important. That’s what gets me up in the morning. How do I make their lives just a little bit better, with the right pharma partners, with the right approaches, the right products? It spans the whole business decision making. I’m really proud that my team are all very aligned to that as well. You see them making those decisions around, what does this mean for that end person? And what will that mean for the future?
27:23 Eugene Borukhovich
Great mission. Ciara, thank you very much for joining and I’m sure we’ll be hearing more from Beats Medical and yourself.
27:30 Ciara Clancy
Thank you so much. Lovely catching up with you.
27:34 Eugene Borukhovich
Thanks so much for tuning into Digital Therapeutics Edition of Digital Health Today, a production of Mission Based Media. Be sure to hit that subscribe button to this podcast on your favorite podcast player, so you’re then automatically notified when we post our upcoming episodes, where I speak with dozens of leaders and trailblazers who are forging the path for digital therapeutics. If you’d like to learn more about YourCoach Health, or Brian Dolan’s Exits & Outcomes, you can always find the links to this and more in the show notes for this episode. You can connect with me personally on Twitter @HealthEugene, or follow my journey of writing my first book, Hard Pill to Swallow at hardpilltoswallow.substack.com.
I’m Eugene Borukhovich, and catch you next time.
