apple inside

http://seekingalpha.com/article/3506376-apple-watch-apple-inside



Robert Honeywill
Long only
Profile| Send Message| Follow (287 followers)
Performance
Apple Watch: 'Apple Inside'
Sep. 12, 2015 5:54 AM ET | 19 comments | About: Apple Inc. (AAPL), Includes: BSX, JNJ, MDT, NMRX, SSH, STJ
Disclosure: I am/we are long SSH. (More...)
Summary
For Apple Watch, positioning to be the 4th participant in the design of fully implantable medical devices (FIMDs) is critical to its success in the high value remote patient monitoring market.
Currently, the three main participants in the developmental stage of an FIMD are the user, the medical staff, and the engineer or technician.
A fourth participant, the automated remote communications designer or technician, is needed to enable FIMDs and Apple Watch to realize the fullest potential for remote patient monitoring, diagnosis, and feedback.
Pharmaceuticals are purely therapeutic. They cannot measure, monitor and communicate responses. Nor can they raise or lower their dose/effect through feedback. Only medical devices have that ability.
The future for Apple Watch is clearly linked to the development of fully implantable medical devices designed to facilitate remote 2-way communication via the Apple Watch. "Intel Inside" becomes "Apple Inside".
The discussion
Apple (NASDAQ:AAPL) has shown enormous growth in both revenues and profits over the last 12 years, 2003 to 2014, as shown in Table 1 below.
TABLE 1
The challenge for Apple is continuing to achieve high growth due to what some might refer to as the "law of large numbers", but I prefer to call the "phenomenon of the doubling penny" (for more on that refer to my article, "Johnson & Johnson: Last 7 Years' Earnings More Than Previous 107 Years'").
While I am a great admirer of Johnson & Johnson (NYSE:JNJ), I do believe that Apple has an advantage over JNJ and most other large enterprises when it comes to growth. While others compete to serve markets, Apple creates markets, leaving others to nibble at the edges and attempt to catch up.
But then Apple confounds these would be competitors with new innovations, that, in accordance with its new marketing slogan, "The only things that's changed is everything."
Below I discuss how Apple might change everything in the field of mobile remote health monitoring under the following headings -
The imperatives for Apple in remote patient monitoring;
The 'high value' versus 'high volume' market in remote monitoring of patients;
The present design process of a fully implantable medical device and changes in that process to aid remote monitoring;
The increasing number of fully implantable medical devices for various purposes and the challenges that brings (how many different devices can one patient have implanted?);
Solutions to the increasing number of fully implantable medical devices; and
Apple's role in developing the "Swiss army knife" of medical devices
The imperatives for Apple in remote patient monitoring
Apple is the leader in mobile communications technology and devices, and the world's largest corporation by market cap, because it provides the smartest solutions in a format that is appealing to customers.
And part of that appeal to customers is they know they have the smartest device around. It is a status symbol as well as a very useful tool.
Neil Cybart, in his excellent article, "Apple's Cheaper Stock Buyback", notes that -
Approximately 75%-80% of iPhones sold each year are to previous iPhone owners.
This repeat business, if it is to continue for iPhones and Apple Watches, obviously requires continual innovation to create new and unique features to entice upgrades.
There are two potential markets in remote patient monitoring.
Firstly, there is the more easily targeted high-volume market addressing measuring of blood pressure and heart rate, et cetera.
Secondly, there is a lower volume, high-value market targeting the measuring of such things as pulmonary artery blood pressure, a critical, potentially life-saving measure.
This high-value market has much higher barriers to entry. It provides an opportunity for Apple to differentiate itself from the multitude of "also-rans".
That differentiation will define Apple as the smartest remote patient monitoring firm and should reflect on the view of Apple in both the high value and also in the high volume, low-value markets.
Apple cannot afford to allow Google (NASDAQ:GOOG) (NASDAQ:GOOGL), or any other operator, to establish supremacy in that high-value market and thus become the "smarter" brand.
The 'high value' versus 'high volume' market in remote monitoring of patients
The high-volume market that Apple has looked at with the Apple Watch targets the relatively simple tasks of monitoring blood pressure, heart rate, and a more complex task of blood sugar levels (the latter item believed to require FDA approval).
These basic measurements would more likely be useful in reducing visits to a primary care physician for such monitoring.
The measurements might be relevant to a large proportion of the population. But the opportunity cost per visit avoided would be low compared to the dollar benefit from measurements that might assist in avoiding hospitalizations.
The St. Jude (NYSE:STJ) CardioMEMS HF System device for measuring and reporting pulmonary blood pressure is a very good example of a type of more difficult to achieve measurement. Reporting of once a day measurements of pulmonary blood pressure can allow the treating physician to fine tune medication to better control the condition. More frequent measurements in a mobile patient, if made practical, could have decided advantages.
The CHAMPION trial demonstrated that pulmonary artery pressure (PAP) monitoring using the CardioMEMS HF System significantly reduced heart failure (HF) hospitalization rates in patients with NYHA class III HF (see here).
St. Jude reports that CardioMEMS is clinically proven to reduce HF admissions by 37% (see here).
The significance of reducing HF admissions can be seen from this 2011 American Heart Association Statistical Update which reports that in 2004, "The 1.1 million hospitalizations for CHF amounted to nearly $29 billion in hospital charges.69"
That is an average of ~$26,000 per hospitalization. It can be expected the average cost and the number of hospitalizations are much higher today.
What is more, discharge from a heart failure hospitalization is followed on average by a readmission within 30 days in ≈24% of cases, with ≥50% patients readmitted to hospital within 6 months of discharge (see here).
So, it can be seen that the prevention of HF (and other) re-hospitalizations by remote monitoring provides the potential for massive savings in hospitalization costs.
In addition, the Patient Protection and Affordable Care Act established financial penalties for hospitals with the highest readmission rates during the first 30 days after discharge. Hospitals have strong incentives to embrace remote monitoring that can reduce re-hospitalizations.
The present design process of a fully implantable medical device and changes in that process to aid remote monitoring
From the International Journal of Neurology (see here) -
From the first pacemaker implant in 1958, numerous engineering and medical activities for implantable medical device development have faced challenges in materials, battery power, functionality, electrical power consumption, size shrinkage, system delivery, and wireless communication. With explosive advances in scientific and engineering technology, many implantable medical devices such as the pacemaker, cochlear implant, and real-time blood pressure sensors have been developed and improved. This trend of progress in medical devices will continue because of the coming super-aged society, which will result in more consumers for the devices. The inner body is a special space filled with electrical, chemical, mechanical, and marine-salted reactions. Therefore, electrical connectivity and communication, corrosion, robustness, and hermeticity are key factors to be considered during the development stage. The main participants in the development stage are the user, the medical staff, and the engineer or technician. Thus, there are three different viewpoints in the development of implantable devices.
For remote patient monitoring to be truly successful in the high-value area, there needs to be a further participant in the design process bringing a fourth viewpoint.
Wireless communication is already available between fully implanted devices and devices outside the body, but the process is not automatic and requires considerable operator intervention.
To gain an understanding of the cumbersome nature of taking and transmitting a once daily "remote monitoring" measurement of pulmonary artery pressure using St. Jude's CardioMEMS HF System device, please listen to the series of 5 videos describing the process (link here).
Below is an image of the complete at home equipment for CardioMEMS -
Image courtesy of St. Jude website
The objects are not to scale. The cylindrical object with a loop at either end is the implantable device. The pillow-like object is the size of a bed pillow.
The imperative for the fourth participant, the remote communications designer, is how to gather data from one or more implanted devices in a mobile patient and seamlessly transfer the data to the relevant reviewing physician/s.
Pulmonary artery blood pressure readings using the CardioMEMS HF System device are taken from outside the body, thus requiring the bulky equipment and special procedures described in the videos referenced above. The need to take readings from outside the body is due to the passive nature of the implanted device, lacking a power source such as an implanted battery and with no implanted reading device.
While this might have its advantages, it is not conducive to the type of continuous monitoring and seamless collection of data possible with a complete implanted system such as the Chronicle Implantable Hemodynamic Monitor (IHM) system developed by Medtronic (NYSE:MDT).
The Chronicle Implantable Hemodynamic Monitor is about the size of a pacemaker. It consists of an implantable monitor and a transvenous lead carrying a pressure sensor. The device contains a lithium silver vanadium oxide power source, integrated circuitry, and a bi-directional telemetry transmission coil hermetically sealed in a titanium can.8 (see here).
See image below of the Chronicle device (quite similar to a pacemaker in appearance and placement) -
Image credit: Medtronic
The Medtronic Chronicle implantable hemodynamic monitor used a specialized RV lead/sensor. The device was able to monitor and telemeter: Systolic and diastolic pressure; estimated pulmonary artery diastolic pressure; RV dp/dt (positive & negative); heart rate & activity; core body temperature; and provide continuous remote monitoring (see here).
Both the CardioMEMS and the Chronicle devices had primary endpoints relying on better titration of medications, based on pulmonary artery pressure readings, to reduce HF hospitalizations.
CardioMEMS gained FDA approval with a 37% reduction in hospitalizations compared to control. Chronicle achieved similar reductions in HF hospitalizations, but due to other endpoints mixed in with hospitalizations, the overall reductions of 21% were not considered statistically significant by the FDA (illustrates the importance of trial design).
But Chronicle showed the feasibility of a comprehensive implanted system with remote communication capability, and there are others developing similar devices.
Of particular noteworthiness is the Fraunhofer Lighthouse Project: Theranostic Implants
Below is a rather extensive but very informative extract from the website -
Twelve Fraunhofer Institutes led by the Fraunhofer Institute for Biomedical Engineering IBMT have joined forces to work on the Fraunhofer lead project "Theranostic Implants". Until now most implants have been of the purely passive type - a typical example is orthopedic devices for bone repair. But there is a growing interest in active "theranostic" implants that combine therapeutic and diagnostic functions in a single medical device. These devices create a closed feedback loop in which vital parameters are recorded and provide the input for therapeutic intervention. Pacemakers, for example, are capable of responding to the need for increased blood flow to the muscles, for instance during physical exercise, by adjusting the stimulation pulse rate. Theranostic implants record numerous different biosignals, which they process, analyze and transmit to an external receiver. These signals then provide the basis for therapeutic intervention, which can take the form of electrical, biochemical or mechanical stimulation.
Theranostic implants must be able to function reliably in vivo for many years, preferably throughout the patient's life, despite being exposed to constantly fluctuating cell growth in the damp and warm environment of the human body. This is one of the greatest challenges facing the engineers developing these highly complex sensor-actuator systems, which also need to be as small and light as possible. A high degree of biocompatibility with the surrounding tissue is therefore a fundamental requirement, because the implants might otherwise cause a rejection response.
The partners in this project will develop three demonstration models. Their choice of applications was based on diseases that account for a high proportion of the costs borne by German health insurers. The top items on this list are cardiovascular diseases, skeletal system diseases and neuromuscular diseases.
In each of these cases, medical implants are being used more and more frequently to heal the disease or attenuate its symptoms, and to improve the patient's quality of life.
Sensor implant for monitoring blood circulation - cardiovascular demonstrator
For persons suffering from circulatory diseases such as hypertension or stroke, long-term monitoring could be very helpful. Ideally, the therapy for these patients should include continuous monitoring of the pressure in the blood vessels of the cardiovascular system (my emphasis). Current methods only permit short-term monitoring, which has to be carried out in an intensive care unit using catheters and intravenous filters. Such interventions are unsuitable for long-term monitoring because they carry the risk of infection and can lead to complications.
The challenge that the researchers have set themselves is to develop smart sensors based on microsystems technology and to encapsulate them in such a way that they can be durably implanted in the patient's body. Apart from measuring blood pressure, they can also be used to measure other parameters such as acceleration and temperature, and transfer the data to an external receiver. The data obtained in this way will facilitate early diagnosis and improve the disease prognosis by enabling optimized drug treatment. Other advantages include less time in hospital and reduced treatment costs.
The statistics clearly illustrate the applicability of this type of implantable sensor: The proportion of patients with high blood pressure (hypertension) amounted to 37.3 percent in the year 2000 and is expected to rise to 42 percent by 2025. Hypertension is responsible for 62 percent of stroke cases and 49 percent of all cases of coronary heart disease."
It seems entirely feasible that a system, designed as described above, could communicate with the Apple Watch or an iPhone and transmit data to a monitoring physician/s seamlessly and without the need for patient intervention.
The likelihood of such a system working in a seamless manner for remote patient monitoring would be enhanced by Apple communications experts being involved at the design stage.
The increasing numbers of fully implantable medical devices for various purposes and the challenges that brings (how many devices can one patient have?)
Below is a selection of images of fully implantable medical devices, approved or under development -
Image 1 - Pacemaker (image source and description) -
The pacemaker is shown here implanted on the left side, but can be implanted either on the right or left side. Implanting on the right side allows the use of a longer lead implanted in an "S" shape to allow for increased flexibility in movement.
Image 2 - CRT-D device from Medtronic incorporating both a pacemaker and a cardiac defibrillator (image source and description) -
Image 3 - Medtronic's fully implantable heart monitor with remote monitoring capability
The Reveal LINQ ICM is the smallest heart monitor on the market. It automatically detects and records abnormal heart rhythms for up to 3 years. Remote monitoring is with Medtronic's MyCareLink Patient Monitor (see here)
Image courtesy of Medtronic
It is not too hard to imagine a receiver in the wrist band of an Apple Watch that the wearer could hold against their chest to download and transmit data from this implanted device via an Apple Watch or iPhone.
Image 4 - Carotid Baroreceptor Activation device from CVRx (image source and description) -
(click to enlarge)
Image 5 -Fully implantable C-Pulse counter-pulsation device under development by Sunshine Heart (image source and description)-
Image courtesy of Sunshine Heart
Note - As described further below, where a patient has an implanted CRT device, the Sunshine Heart (NASDAQ:SSH) C-Pulse fully implantable model (FIM) electronics could be housed in the CRT device capsule, thus eliminating the controller shown in the above image.
To learn more about C-Pulse see my article, "Sunshine Heart C-Pulse: 'The Lance Armstrong Effect' - Setting C-Pulse Apart"
Solutions to the increasing numbers of fully implantable medical devices
Including the Chronicle, I have shown 5 images above of different fully implantable devices, all with a hermetically sealed case with a size of about six stacked silver dollars, containing integrated circuits, software, and long life batteries.
The Sunshine Heart C-Pulse FIM also has a hermetically sealed case containing integrated circuits and software, but with its power source coming from a transcutaneous energy transfer system (TETS) (unlike LVADs, a back-up battery inside the body is not required, as continuous operation of the device is non-obligatory).
The obvious solution to reducing the number of devices is to incorporate two or more device components into one hermetically sealed case.
This is already being done with CRT-D devices combining the functions of both a pacemaker and a defibrillator (see Image 2 above).
I emailed Dave Rosa, CEO of Sunshine Heart, to enquire how the C-Pulse percutaneous interface lead (PIL) model being used in the current Pivotal trial, and the fully implantable model (FIM) due to enter in human trials next year, interact with a CRT device, and his reply was as follows -
C-Pulse PIL model -
For patients that already have an implanted CRT only, ICD only, or a CRT- D device (CRT and ICD combined), they function independent of each other. When the heart gets out of rhythm and begins to beat too rapidly, our software senses this via our epicardial leads and terminates support until the heart gets back into rhythm, and then automatically restarts support.
C-Pulse Fully Implantable Model -
All of our recent animal experiments have connected directly to a CRT-D device. Our epicardial leads terminate with a IS 1 connector which is a common connector that can plug directly into a CRT - D device as it typically has two ports. In the future, with support from the CRT-D manufacturers, we could directly connect to their device to control our system. Many doctors would love to use our device based on heart rate which is ideal for this set up. For example, if a patient's heart rate goes beyond 120bps, our device could provide full support, meaning one inflation and deflation for every heart beat. But, if a patient's rate only went to 100bps, we could program it to only inflate/deflate every 2-4 heart beats.
All of our patients have at least an ICD, CRT or CRT-D (combination CRT and ICD) device (note that one had an ICD which became infected and the patient had to have it removed).
It seems feasible that where a patient has the need for a CRT device, the fully implantable C-Pulse system might not require a separate controller (see Image 5 above). Instead, the integrated circuits and software of the Sunshine Heart C-Pulse controller could be in the CRT device capsule.
It also follows that the battery in the CRT device could be replaced with a rechargeable battery utilizing the TETS power source for recharging.
This feature of an internal power source, associated with a Sunshine Heart C-Pulse implant, opens up a whole new world of possibilities for combining the functions of all of the various implantable medical devices into one hermetically sealed capsule with multiple ports for leads for various purposes.
With the ability to miniaturize circuitry, and with newer SOC technology, there is probably no barrier at present to fitting all of the circuitry and controls for the many different implantable medical devices into the space currently available in one capsule.
The barrier would be achieving battery capacity and longevity equivalent to the sum of the individual batteries powering the many different implantable medical devices.
But with the internal power source associated with a fully implantable C-Pulse, powered by TETS, being available for battery recharge, this should no longer be an issue.

The two enterprises with the greatest likelihood of achieving an FDA approved mechanical circulatory support device utilizing a TETS powered system in the next 2 to 3 years are -

• ReliantHeart; and
• Sunshine Heart Inc.

In addition to these two enterprises, a collaboration would be possibly desirable with a leading CRT manufacturer such as Medtronic, Boston Scientific (NYSE:BSX) or St. Jude to gain access to patented technology for the SAK device. Both ReliantHeart and Sunshine Heart have incredibly capable technical people. Brian Brown, Sunshine Heart's Senior Vice President, Operations and Technology, is a former Vice President of Research and Development for Boston Scientific, with 24 years with that firm.