Onera raises $9.3M to build out its at-home sleep tests

Steven Loeb · April 23, 2019 · Short URL:

The company is on a mission to make sleep tests cheaper and more accessible

A few years ago my doctor determined that I might have sleep apnea, but the only way to get a real diagnosis was to go to a sleep lab, not once but twice; the first time was to figure out if I had it and then I had to go back determine the right level for my breathing machine. The process was not fun; the bed and facilities were perfectly fine, but being hooked up to electrodes and wires, and having to sleep in a strange bed, was actually pretty nerve wracking and I barely even got any sleep at all while I was there.

There are plenty of at-home solutions for sleep problems, but none of them seem to be very good or reliable. That is where Onera comes in; the company is finally trying to get rid of all of those pain points by creating an at-home sleep solution that can diagnose sleep related issues as accurately as a sleep lab by developing a medical grade device. 

"If you think about sleep diagnostics, there are devices claiming to give you information about your sleep, but there’s a lot of noise out there, from the gadgets that you wear on your wrist, or in your mattress, all the way to going to a sleep lab and spending a night with tubes and wires strapped to your body," Raphael Michel, CEO and co-founder of Onera, told me in an interview. 

"What’s unique about Onera is that we are a medical device company. We are developing a medical grade diagnostic tool that is pretty much equivalent to what you can only find today in a sleep lab that can actually diagnose any sleep disorders you might have, and give you the information you and your doctor needed to prescribe a solution and fix the problem."

On Tuesday, the company announced it raised $9.3 million in a Series A funding round led by Jazz Pharmaceuticals, imec.xpand, as well as other investors including imec and BOM. The company had previously raised a €1 million seed funding round. 

Headquartered in Silicon Valley, Onera was spun of out an R&D center in the Netherlands, which Michel calls "the world leader in nanotechnology."

Here's how it works: once a doctor prescribes an Onera sleep test, the company ships the equipment, which consists of two patches, one that they put on their chest and one they put on their forehead, directly to the patient's home. Those patches will allow Onera to monitor everything wirelessly, rather than with all of the wires and tubes that are required in a traditional sleep study. 

"It’s very comfortable, very small and you wear it at night, in your home, in your own bed. The beauty of it is, if we want to do it for more than one night to get a trend, you can wear it for two, three, four, five, seven nights and now get insights. It’s all medical grade diagnostics," Michel explained. 

Once Onera has gathered the necessary information, they send it to the patient's doctor, using AI and machine learning to distill the information into a simple report showing that either the patient is fine or that they have any one of a number of potential sleep disorders, including insomnia, sleep apnea or narcolepsy. The idea is to make it as easy as possible for patients to get a sleep study and to then get a diagnosis.

"We see this as transformative because if you look at the U.S. there’s an estimated 50 to 70 million people with a sleep disorder, but only an estimated 4 million sleep tests that are done per year. There’s a gap. Lots of people don’t have time to go, they don’t have the money. It’s not a pleasant experience, and so we want to simplify all that, make it a very trivial step for people who are tired during the day, who suspect they have a problem with their sleep, to get answers because when you want to fix a problem the first step is to understand what the problem is. That’s what we’re going to do," said Michel.

Onera represents a change in sleep study technology that Hartmut Schneider, M.D., Ph.D. Chief Medical Officer and co-founder of Onera, told me should have happened a long time ago.

"It is ridiculous that over the last 30 to 40 years, the interfaces, the electrodes that we attach to the patient, have not been changed regardless of the development of all the downstream computers and recording systems. That is one uniqueness of what we have here, that we would replaced the electrodes that are put on the patient to monitor the body functions by using modern chip technology," he said 

"The second differentiator is that either monitoring devices out there are not medically validated, or they are devices that are so limited in the way to monitor a patient that false positives and false negatives results will come out of it. We are going to change with our system because we provide the gold standard and a patch based system so that the patient and doctor has accurate diagnostics available anywhere."

Right now, Onera in the development phase for it's product, and it will be using the funding, in part, to continue to develop the product and turn the technology, which has already been tested a number of times, into a medical diagnostic solution.

The money will also go toward developing the market in the U.S. and preparing for commercial launch of the product. That will include, over the next several months, the company conducting a series of pilot programs across the country to work with pulmonologists, neurologists and psychiatrists, ENTs, pediatricians, and the military.

"We are starting to do clinical validation studies and we’ll continue doing that throughout this year. And we’re actually looking for clinical partners, for doctors and thought leaders, to work with us on a few pilot programs in the U.S. to actually incorporate our technology in their existing set up and prove how we can help them better help their patients and be more efficient with their staff. We want to show how we can help them build a virtual sleep lab outside their hospital or their lab, because now every bed, everywhere, becomes a sleep lab with Onera," said Michel.

Another important aspect of those partnerships will be actually helping the sleep centers themselves become more streamlined and efficient, saving them time and money.

"The most expensive part of running an existing sleep lab is actually paying for the staff to put on the wires and monitor the patients during the night. That’s 80 percent of the time and usually the cost of running of a sleep lab on a day to day basis. If you just used our electrodes instead of the existing ones, instead of one technician taking care of two or patients, one technician can take do actually 10 or even 15 patients in the night," Schneider said. 

"We believe that we can really help improve those sleep doctors and sleep labs grow their business and help more patient increase their capacity. And also do it in a much more cost effective manner because now, instead of having to pay the cost of a facility, having a building with beds and maintaining all of that, all of that goes away. They can scale without having to scale the brick and mortar part, the building itself. So we think it’s more scalable, more user friendly, more cost effective model," said Michael. 

The end goal for Onera is, first, to, in Michel's words, "make a sleep test as trivial as an eye test."

"Sleep is so important and sleep is vital, we all know that, but sleep disorders not only can really negatively impact your life on a day to day basis, but also can lead to health complications or actually make chronic conditions worse. In my opinion, there is not a simple way to get a comprehensive, actionable sleep diagnosis today in a scalable and cost effective manner. We’re going to offer that, we’re going to solve that," he explained. 

"I can imagine in the future, a few years from now, that if you’re not feeling  well during the day, you think you have a sleep disorder, it’s completely trivial to get a prescription for a Onera sleep test, and you understand your sleep, you understand whether you have an issue or not. If you have an issue, you can actually work with doctors to solve it. And if you don’t at least you have peace of mind and it is revolutionary in itself."

The second, and equally important, part of Onera's mission it to take all of the data it will be collecting from these sleep studies and turn it into something that can help patients better understand their own sleep/ 

"As we’re building our database, we’ll be able to actually understand sleep and sleep disorders better than anyone has been able to do it. Take the diagnosis and treatment options to the next level thanks to all these insights we’re collecting. So, we’re also very excited about that. Five years from now, having Onera be the reference in sleep diagnostics is ambitious but, at the same time, I think we’re well positioned to get there."

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