Jennifer Whitney04.04.08
Achieving a “Buzz Kill”
Ever wonder how a start-up company is born? In the case of Neuromonics, an audiologist suffering from a common condition developed his own treatment
Jennifer Whitney, Editor
Most of us have been there before: After a loud concert, or maybe a motocross race, your brain echoes a persistent “ringing in the ears,” as many people have described it. For most people, the noise is nothing more than a temporary annoyance—a blip, if you will, in your brain waves reacting to the strain on your auditory canal.
Australian Dr. Paul Davis was no stranger to experiencing this phenomenon. As an audiologist who had dealt with numerous painful ear infections during childhood, he wasn’t too concerned when a mildly irritating “noise” began invading his mind. However, Davis soon realized he had much more in common with some of his patients than first thought. He had tinnitus, a condition characterized by the perception of sounds, such as ringing, high-pitched beeps or buzzing, where none exist.
“My tinnitus came on gradually over my first year of clinical practice…firstly just noticeable when in the quiet of the sound-attenuating booths I was testing children in,” he recalled. “Like most people, I previously had tinnitus for a few hours after a loud concert, but as it always went away by the next morning, it wasn't disturbing. Many of my musician or motorcycling buddies thought it was a sign of a good concert or ride.”
The condition worsened over time, and it no longer was a minor inconvenience. “As it became more intrusive, it was interfering with my concentration at work, by constantly breaking my train of thought when I was trying to test people's hearing. Both my livelihood and hobbies were under threat,” he said.
Determined not to keep suffering—and unwilling to let his patients with tinnitus do so, either—Davis began working at Australia’s Curtin University of Technology, where over the course of his PhD research, he developed a device programmed with specially modified music to retrain the mind to ignore tinnitus. Realizing he had in his possession a potential breakthrough treatment for tinnitus, Davis teamed with Innovation Capital and Techstart to form Neuromonics Inc., whose global headquarters are in Bethlehem, PA, with offices in Australia.
Bringing a New Device to Market
The timing couldn’t have been better. The American Tinnitus Association estimates that more than 50 million Americans experience tinnitus to some degree, and about 12 million have a severe case of it—as many as 2 million people find the condition debilitating. Formerly thought of as solely a “hearing” issue, scientists now know that tinnitus is more of a neurological than auditory condition.
Although a significant market clearly exists for people with tinnitus, most treatments to date only have been pharmacologic (sedatives or anti-anxiolytics, which don’t treat the problem itself); hearing aids that amplify external sounds in relation to the tinnitus stimuli; “maskers” or noise generators, which produce “white noise” to cover up the tinnitus; and Tinnitus Retraining Therapy, in which maskers are prescribed on top of extensive counseling over a long-term process (anywhere from 18 to 24 months). None consistently gave long-term relief when provided outside the full two-year program and 15 hours of clinician time.
Neuromonics’ Oasis device, which is deliberately similar in appearance to an iPod or other portable music player, is a long-term therapy that is used in conjunction with a custom-tailored, six-month program facilitated by audiology centers. The therapy, approved by the FDA in 2003, is designed to treat tinnitus by interrupting and desensitizing the tinnitus disturbance, thereby changing how the brain perceives the tinnitus sounds.
“We believe you have to treat the entire neurological process, and that’s what our system is doing,” said Jack Springer, CEO of Neuromonics.
A Foreign Venture Hits the US
After gaining product approval in Australia, Neuromonics focused its attention on the US market. Springer came on board in May 2006 as CEO. A longtime medical device industry veteran, Springer spent most of his career working for top-tier OEMs such as Abbott Laboratories and Cordis (a division of Johnson & Johnson) but craved a new venture. When the Neuromonics opportunity came up, “I realized there was a huge market and an unmet need with no real treatment options and an uneducated market,” he recalled. “I said to myself, if this works, it would really be a breakthrough and make a difference.”
The Oasis device was developed by Dr. Paul Davis, who sought to provide tinnitus sufferers with a viable treatment option. Now available in the United States, the therapy has immense market potential. Photo courtesy of Neuromonics. |
Along with the time zone issues, Springer must be aware of cultural differences between his Aussie colleagues and those based in the United States. On a separate note, “The Australians had a lot of pride in their technology and company, and they should be recognized for that,” he said.
Furthermore, manufacturing is still performed by a supplier in Sydney, making it tougher for Springer to deal quickly with product issues when they arise. “When you have a product problem and you’re trying to coordinate conversations, it can be really tough to get the attention that’s needed,” Springer noted.
Like many start-up ventures with a new product, Neuromonics encountered a few problems when the device first reached the US market. One issue pertained to electrostatic discharge (ESD), which can result when moisture interacts with electronic components. Since Australia has little humidity and a good climate, early iterations of the device weren’t designed to prevent ESD. Needless to say, some product failures occurred in the United States. Quality issues can spell death for an emerging company, but Neuromonics wasted no time in correcting the problem.
“One of the things I take pride in is that early on when we had this problem, we got it fixed very quickly,” Springer said. “We were open with our customers and swapped out the product immediately. It can define who you are as a company, and it was a great opportunity for us in that regard. We took this problem as an opportunity to define who we were to our customer. We were responsive in dealing with the problem and our customers appreciated it. This product issue gave us an opportunity to define the kind of company were going to be in our customers eyes.”
Moving Forward
The company’s progress has been encouraging in spite of any challenges. More than 2,000 patients globally have benefited from Oasis, and more than 200 clinics in the United States have used the product since its official launch in early 2007. Furthermore, Neuromonics recently secured a General Services Administration contract, which assigns a contracted price and product number, with the US Veterans Administration and Department of Defense. This means Neuromonics can sell directly to them. With more than 400,000 veteran patients on disability for tinnitus, Springer said there is a huge opportunity to reach a much larger patient population.
Some hurdles remain, though. The treatment’s price tag, which is similar to the cost of a pair of mid-range hearing aids, ranges from $3,500 to $6,000 for the combined costs of the product, initial patient fittings and counseling on tinnitus management. The expense is not yet covered by the Centers for Medicare and Medicaid Services (CMS) or most health insurance plans.
“We’ve met with the CMS, and what we have to do now is show [the device] is not only effective but, from a financial standpoint, show the cost effectiveness of the product,” Springer said. One way the company is looking to achieve this is by conducting a larger US-based study that includes data from centers such as the Cleveland Clinic and Silverstein Institute. “Hopefully they’ll generate some really good data that we can present to the CMS,” he added.
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Looking ahead, with its new government contracts and large potential end-user market, the future appears bright for Neuromonics. Although any young company deals with some uncertainties as it moves forward, the ability to serve a large target group has motivated the Neuromonics team to keep patient needs at the forefront of its efforts.
“I have treated dozens of patients with strong suicidal ideation, and none of them have followed through since starting treatment,” Davis said. “Now they can get relief and control and, progressing towards permanent reduction in awareness, they are very grateful. Many other patients report that they can now sleep so much better and concentrate enough to go back to work, etc.”
Along with his continuing role as a scientific advisor to Neuromonics, Davis recently relocated to the United States to work at Nova Southeastern University in Ft. Lauderdale, FL. Buoyed by all he has achieved with his product invention and founding an ever-broadening company, he will continue to stress to fellow audiologists the importance of ensuring tinnitus sufferers are adequately treated—and, hopefully, continue to gain positive “buzz” for Neuromonics while achieving the ultimate “buzz kill” for patients.