DAVID SHAMAH: JERUSALEM HAS THE POTENTIAL TO BECOME THE INTERNATIONAL CAPITAL OF SMART DEVICE MEDICAL TECHNOLOGY

Posted By Ruth King on December 23rd, 2014

Tel Aviv has tech start-ups, but Jerusalem, already a center of life-science technology, is the perfect place to develop a digital health infrastructure, according to Ori Choshen, CEO of VLX Ventures.

“Digital health applications is a growing field, and there is not yet a national or even world center for an ecosystem to develop those apps. Jerusalem has a strong medical and academic research community, so we think this is the right place to build that ecosystem.”

Part of that ecosystem-in-formation will be on display next week at the second annual mHealth Israel Conference, the biggest digital and mobile health-tech event in the country. Entrepreneurs, experts, academics, and industry representatives will gather to discuss topics such as how pharmaceutical firms are using digital health apps, regulatory issues, health trends, digital health tech and wearable technology, and more.

“MHealth Israel is meant to encourage a broader community of Israeli entrepreneurial talent to address healthcare challenges,” said Levi Shapiro, organizer of the event.

To help bring that digital health ecosystem to life, VLX Ventures — a cooperative project of Van Leer Ventures and the Xenia Venture Capital Fund, specializing in early-stage investments — is investing in start-ups that marry digital technology with health solutions.

Although the company is relatively new, VLX Ventures has closed a deal with international communications giant Telefónica, with the two making joint investments in promising start-ups in areas such as telecommunications, smart home management, wearable tech, and digital health.

One good example of the kind of digital health companies in which VLX is interested, said Choshen, is Eximore, which is developing a system to deliver drugs automatically — via the tear ducts — to help patients with glaucoma and other eye diseases.

“In order to prevent blindness, patients need to use special eyedrops several times a day, and they are usually conscientious about this during the first few months. After that, they tend to slip, missing a session here or there. The damage caused by failing to take their medicine might only show up years later, as it’s easy to fall out of the habit of taking the drops.

“Eximore’s product will relieve the patients from the need to apply daily eyedrops and will solve the compliance problem,” continued Choshen. “It’s controlled by a tiny chip that, along with the active ingredient in the medicine, is placed in a very small and thin film that is embedded in the tear ducts.”

When the time comes to apply the medicine, the system sends out a “feeler” to the ducts — with the irritation causing some tears to flow — and releases the active ingredient in the medicine, which is then applied automatically to the eye.

Like most digital health technology, the Eximore system is personalized for users, learning their lifestyle and “tweaking” it to ensure that they can live with their condition, instead of having their condition become the focus of their lives, Choshen added. Eximore’s product is under development, and will be ready for initial testing next year.

“Initial testing” generally means animal studies, which, as per EU and US government regulations, must go on for several rounds before tests on humans — and final approval for use — is granted. Eximore’s product is by all definitions a medical device, and will require approval for use in the US by the FDA, the US Food and Drug Administration.

But digital health isn’t just about the integration of digital technology and devices; there is a whole market for apps that help with lifestyle issues, such as exercise, weight loss, overall fitness, and other health issues. VLX plans to grow its portfolio — the fund was established at the beginning of the year, and funds six companies — to include such apps as well.

But under new regulatory rules, these apps have now been “upgraded” to “devices,” in the sense that the FDA will now be examining their claims and efficacy. In the past, digital health app makers might have been able to develop technology they claimed could help users lose weight, sleep better, or improve their muscle tone, and sell it via the App Store or Google Play. But recent changes in the FDA rules have expanded the agency’s aegis, and the organization has begun evaluating apps that claim to assist people with health issues.

Although those new rules can be seen as having a dampening effect on development — after all, the Start-Up Nation is known for brash, break-the-rules innovation that eventually gets adopted by the mainstream — Choshen is happy with the new situation.

“In the past, the professional medical device and app makers we work with had a hard time competing against a couple of kids hacking an app and calling it ‘health-oriented.’ Now, they will have to comply with performance standards set by the FDA and other watchdogs. The companies we sponsor do a lot of research before even beginning to code their apps, and there are a lot of device and app makers in Israel that work in this manner as well.”

MHealth chairman Shapiro — who is also a partner at Veritas Venture Partners, which focuses on digital health investments — isn’t afraid of stronger FDA regulations, either.

“The regulatory changes and efficiency incentives accompanying the FDA reforms, coupled with rapid advancements in peripheral technologies such as sensors, wearables, Big Data, the Internet of Things, artificial intelligence, and other areas have led to an exponential growth in the digital health sector. Eighteen percent of the US’s GDP is currently being spent on healthcare, and that number is growing,” he explained.

“With a rapidly aging, more obese and less healthy population, there are unlimited opportunities for agile start-ups to instill Israeli ingenuity into the US’s inefficient and opaque healthcare system,” continued Shapiro, adding that Israel — and Jerusalem — were already well on their way to developing the world-leading digital health ecosystem Choshen dreams of.

“There are more than 200 digital health start-ups in Israel, and funding reached record levels in 2014,” said Shapiro. MHealth Israel will, he hopes, enhance that performance, and “connect promising entrepreneurs with senior healthcare industry executives from around the globe.”

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