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Joe Hage: Hi, this is Joe, I’m here with Klaus Stöckemann. He is the co-founder of Peppermint Venture Partners and he was telling us today about digital health and, in particular, a company that focuses on lazy eye that’s based out of Germany that’s in your portfolio.
Klaus Stoeckemann: It’s called Caterna Vision, it’s based in Germany and they have developed a stimulation software which is stimulating the lazy eye and that is coming with a game so that a kid sitting in front of the computer, being patched, get trained for their lazy eye.
And because they have shown clinical effectiveness they got that product reimbursed…
Joe: … in Germany?
Klaus: In Germany. And some of the public payors in Germany are paying and, of course, since it’s dealing with kids and it’s a severe disease, a lot of self-payment is also happening.
Joe: You mentioned, “Kids was critical to it.” If this were for adults, do you think it would have found reimbursement?
Klaus: If you can prove that such a product would work in adults, it guess it would also get reimbursed.
Joe: Now, it’s not reimbursed in the United States and you had a thought about that.
Klaus: Yeah, I think that the problem in the US currently is this belongs to a digital therapy and I think the FDA is becoming quite strict on whether they have to deal with these products as they would deal with drugs.
Because you do a therapy and you have to do multiple clinical trials to prove the effectiveness and the safety of that digital drug, if you will.
In Germany – or in Europe, basically – this still belongs to the medical device universe and then it’s classified either as medical device Class I or Class II and that’s a major difference than to run a PMA trial in the US.
Joe: Of course. So, if I understand, this is strictly something I can download, use on my iPhone and I can submit to be reimbursed for the payment of that downloaded app?
Klaus: So it’s a bit difficult. It is prescribed by the doctor. It is not a B2C model. So if you are a parent of a kid with lazy eye, you go to the doctor, you discuss with the doctor what solutions are out there, he knows about Caterna Vision so he can prescribe it and if the patient is insured by a payor that reimburses it, they will be reimbursed.
But I can tell you many of the parents are willing to pay that and it costs 360 Euros for 90 days.
Joe: Does the therapy typically take any longer than that?
Klaus: No, the clinical data we have is showing that you see a significant improvement in visual acuity in 90 days which is “goal achieved.”
Joe: When did you get involved? How old is the company?
Klaus: We invested in the company in 2014 but the company is a bit older. They had some workarounds about the business model because first they tried B2C and they found out ophthalmologists didn’t like the B2C model because they don’t like being out of the equation.
I described on our panel the doctor needs to be involved otherwise [the digital health solution] will not work.
Joe: That’s very interesting. And was it your guidance as part of the venture fund to steer them toward B2B?
Klaus: No, we picked them up when finally made the commitment to go the B2B route. The company being out there now, the company has a chance to do the B2C2B approach, meaning the consumer will go to the doctor and say, “Well, I have heard about that product. Please, Doctor, prescribe it to me.”
So the customer becomes the distribution channel.
Joe: Very, very interesting. Klaus Stöckemann, Peppermint Venture Partners, thank you very much.
Klaus: You’re welcome.
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