Closely-held Digital Medical Experts (DME) is developing a low-cost personalized medicine technology that will assist physicians in diagnosing and selecting the most effective treatment for patients with mental health issues, including depression, schizophrenia and bipolar disorder.
“We are using the mathematics of Big Data to move psychiatry out of an era where treatment decisions are made by trial and error and to a position where we can make smarter decisions with a higher probability of successfully treating mental illness,” CMO, Dr. Gary Hasey, says in an interview with BioTuesdays.com.
Dr. Hasey explains the company’s approach is simple yet effective. “We analyze data from widely available electroencephalography (EEG) instruments to provide rapid, objective results that physicians can act on.”
By combining Big Data and “machine learning technology,” he says DME’s patented algorithms and databases are used to analyze a patient’s EEG to diagnose depression and then select the optimal treatment for that patient at the outset.
“This would reduce the time to recovery and dramatically reduce the impact of mental illness on the individual and his or her family, an employer and insurance provider,” he contends.
“Not only can we determine if a drug is the best treatment option, we can also determine if non-drug treatments, such as cognitive behavioral therapy, trans-cranial magnetic stimulation (TMS) and electroconvulsive therapy (ECT), are the best option.”
According to the WHO, depression is the No. 1 disability in the world. About one-in-10 Americans aged 12 and older takes antidepressant medication, with the economic and social burdens running in the tens of billions of dollars a year in the U.S. alone.
CEO, Bruno Maruzzo, says selecting the correct treatment for a patient is a significant issue, with studies indicating that current trial and error methods can lead to a 33% to 37% success in the initial treatment selection. In other words, more than 60% of patients leave the doctor’s office with a prescription that will not work or potentially will make the condition worse, he adds.
“With such a high degree error, the process can lead to months of hardship for patients, family and practitioners, with potential side effects often making the condition worse for a patient,” he points out.
He says major depressive disorder (MDD) will be the company’s initial commercial offering. “We expect to begin selling our technology in early 2017, beginning in Canada and then moving to the U.S. and globally.”
DME has completed successful pilot studies in depression, schizophrenia and bipolar disorder and is half way through a validation study in MDD, known as SPPAR, or Signal Processing to Predict Anti-depressant Response.
The SPPAR clinical study, has recruited 75 of its intended 150 subjects. It is designed to confirm the company’s initial study results, optimize its algorithms and processes, and add four drugs and cognitive behavioral therapy (CBT) to its database.
“At that point, we will have five drugs, TMS and CBT in the database and have, what we believe, is a commercially viable product,” Mr. Maruzzo adds.
He points out that the technology also can make a psychiatric diagnosis. In an earlier pilot study with 64 patients clinically diagnosed with MDD, the company’s technology correctly identified 56 of them, or 87%, with MDD. In a further 40 patients clinically diagnosed as schizophrenic, the company was able to identify 36 of them, or 90%, with schizophrenia. In addition, the company identified 81 of 91 normal healthy volunteers, or 89%.
In another study, DME was able to differentiate between depression in subjects with bipolar affective disorder (BAD) from those with MDD, using pre-treatment EEG information, Mr. Maruzzo says.
Of 12 subjects clinically diagnosed with BAD, the company correctly identified 11 of them, or 92%, and in 21 subjects clinically diagnosed with MDD, the company was able to correctly identify 20 of them, or 95%.
Dr. Hasey says the company is preparing to publish results of a study about cognitive behavioral therapy, a form of psychotherapy, which works well in about one-third of patients with MDD and is designed to avoid drug therapy and potential side effects.
“From EEG information, we were able to tell if a patient needed to be on drugs or could benefit equally well from psychotherapy, TMS or ECT,” he adds.
DME is currently seeking $250,000-to-$500,000 in seed financing to be followed by a Series A round of $750,000-to-$1-million, as well as further grant funding, Mr. Maruzzo says.
The seed round will be used to complete the SPPAR study, establish its business operations, develop reimbursement and regulatory strategies and add to its staff.
“Our business model is pretty simple,” Mr. Maruzzo suggests, noting that DME will provide an analysis of EEG signals on a fee-for-service basis. The company has had preliminary discussions with medical labs to perform the EEG and collect data, and the feedback has been very encouraging, he adds.
In addition, he says government and third party payers in Canada have been very receptive to the company’s technology and business model because of the high cost of mental illness and lack of objective tools to help physicians deal with those patients.
The company is currently budgeting a $500 fee for its services, which would generate a gross margin in the 70% range after costs.
DME expects to begin planning its approach to entering the U.S. market by the end of this year. “We’ll begin working with a diagnostic lab and key opinion leaders and then proceed to seeking a sales force to market the service to physicians and establish reimbursement.”
According to Mr. Maruzzo, DME has looked at the cost of managing a patient, using the current success rate of picking a correct treatment, which is about 35%. “We believe our technology can raise that success rate to 85%, so when you run the numbers, we believe we can save the health care system an average of $5,000 per patient and four-to-six months of disability.”
Dr. Hasey adds that with the DME technology, general practitioners would be able to function as well as highly-trained mood disorder specialists at diagnosing and initiating mental illness treatments. “The level of care could be dramatically improved.”