Somonomed released their half year results last week and took the covers off their new in-device apnoea-hypopnoea monitor called Rest Assure. The Company commissioned research in 2019 which showed that the absence of reliable nighttime monitoring with Somnomed devices was a barrier to prescribing for nearly 50% of sleep physicians. This has always been a limitation of intraoral devices and companies that sell CPAP machines know it. Resmed has exploited MyAir - an App that offers to be a coach and a training assistant. Studies have shown that patients who are engaged with their therapy are more compliant. Demonstration of effectiveness can also be used to justify the cost of therapy to third-party payers and insurance companies. Data that can be downloaded from the cloud is of great value to physicians who are trying to address all aspects of the patients' physiological derangement.

The technical details of this device are sketchy. Somnomed rightly wants to protect its IP and also needs to study this technology against validated home-based apnoea monitors like the Nox T3. Previous research has identified that intra-oral plethysmography can estimate heart rate, respiratory rate, arterial oxygen saturation and can also identify sleeping postures, breathing routes and compliance in wearing the device. It is well known that CPAP is more efficacious than mandibular advancement devices (MAD). Compliance is however higher with MAD and the effectiveness of CPAP and MAD is about the same. If this technology is validated by clinical trials this year it will sway medical opinion towards MAD. There is a large untapped market of more than 500 million people worldwide suspected of having mild to moderate obstructive sleep apnoea.

Somnomed is trying to transform itself and as I previously commented, it is not a fast road to riches. Winning over medical opinion and the regulatory authorities that protect the market is an arduous process but the Company has made a promising step in that direction.

Somnomed is a leader in mandibular advancement devices (MAD). MAD opens  the retrolingual space by pulling the tongue forward with the lower jaw, relieving  the inspiratory tissue collapse in the hypopharynx which causes snoring and  obstruction (sleep apnoea). They have a dominant position in Europe and in the  Netherlands, they own about 80% of the market. In the USA they have struggled  due to reimbursement issues which favour sleep apnoea machines over MAD.  

Their portal into this market is through the dental profession, specifically dentists  with interest or experience in fitting these devices. They have earned the trust and  support of this group because their devices are made of high-quality materials  which last and are true to form and purpose.  

The Company realises that it is no good to have only a second bite of the cherry.  90% of OSA (obstructive sleep apnoea) patients are fitted with a sleep apnoea  device. This is because patients with OSA are referred to respiratory or sleep  physicians and CPAP devices are the go-to device used by these physicians. To get  its foot into the door, Somnomed needs to find a way to showcase its devices to  these physicians and to convince them, through the superiority of its design and  by peer-reviewed, well-constructed clinical studies, that it is capable of providing  outcomes which match or exceed those of CPAP.  

A small study showed: 

1. Oral Appliances (OA) reduced oxygen desaturation index median by 50% 2. Apnoea index decreased significantly in OA patients 
2. AHI index decreased by CPAP was more effective 
3. OA conferred some benefit in severe OSA patients who refused to wear  CPAP 
4. CPAP was more effective than OA in eliminating snoring, but was noisier for  partners
5. OA more effective in patients with mild to mod OSA, not too obese,  mandibular prognathism and patients who were had good forward  protraction of the mandible 

(Rossi, A: (International Journal of Dentistry Nov 2021 ‘Clinical Evidence in the  Treatment of Obstructive Sleep Apnoea with Oral Appliances: A Systematic  Review’) 

To achieve its aim of penetrating the physician-prescribed CPAP market,  Somnomed has a three point plan: 

1. Demonstrate effectiveness (by studies) 
2. Do clinical research and change reimbursement policy (in the USA)
3. 3. Enlist key opinion leaders (medical experts) to spread the word to  physicians  

These are not a quick fix.  

There are other things they could do in the meantime.  

These things could include bedside monitoring, cloud-based data that feeds back  to the referring physician, smart technology built into the devices to monitor and  adjust positioning as patients sleep, and office-based screening tools that  physicians can use to evaluate new referrals and triage them into CPAP or MAD. 

I think that The Company needs to think more laterally and to be innovative and  front-running in its technology. They are talking about a ‘Smart Ecosystem’ to be  released early next year but, until I see it, I will need to be convinced that it is  truly capable of being transformative.  

Until then I won’t be investing further in the Company. 

You can read Wilson’s analysis here https://somnomed.com/wp content/uploads/2021/08/WILSONS-August-2021-Pricing-in-structural innovation.pdf 

Disc: I hold SOM