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Meet The UK Startup That’s Taking On Big Pharma — With Digital Medicine

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Five years ago Peter Hames had chronic insomnia. Today he’s the co-founder of Big Health, a multi-million dollar VC-backed startup that’s setting out to create a new category of healthcare — under the self-defined banner of ‘digital medicine’.

The best startups begin with the desire to fix a genuine problem. And in Hames’ case the trigger was a personal sleep problem. Back in 2010 the experimental psychology graduate cured his own insomnia using a self-administered course of CBT (Cognitive Behavioral Therapy) from a book, rather than taking the only option being offered by his doctor: a course of sleeping pills.

The difficulty Hames had in accessing and administering what he knew to be an effective alternative to drugs was the catalyst for founding the startup business that’s been keeping him busy ever since. He even persuaded the author of the CBT book he used — sleep disorder expert professor Colin Espie (now at Oxford University) — to come on board as his co-founder.

Big Health‘s clinical team has since swelled to also include the former president of the British Sleep Society, and a theoretical physicist from Cambridge University, among other PhDs. The startup has gone from four staff back in December to 15 now, and recently opened an office in the US, all fueled by an Index-led cash injection.

Any sleepless nights Hames has now are not the result of a chronic condition — but the inexorable byproduct of being an entrepreneur. Backers of his East London-based health tech startup include Index Ventures, Forward Partners and Esther Dyson, with some $3.8 million total funding raised to date, including a seed round and a $3.3 million Series A earlier this year.

Index’s participation is particularly notable given it’s the fund’s first foray into health tech — helping to lay a foundation of credibility that Big Health aims to build on.

“On our board is Neil Rimer, who’s the co-founder of Index. It’s their first ever health tech investment. I think that’s important for the industry,” Hames tells TechCrunch. “In health people need reassurance that you have proper resources, that you’re not just some garage operator; that you’re a proper team with some proper backing behind you.”

“It’s acknowledged by healthcare systems that talking therapies are better than drugs but there’s still a massive access issue. Waiting lists on the [UK's] NHS for depression CBT are like 18 months,” he adds. “That’s the premise of Big Health. Can we create the world’s first digital medicine company?

“Can we deliver evidence-based behavioural medicine… in a way that mimics all of the best qualities of drugs, so that it’s scalable, affordable, evidence-based and accessible. Technology, for the first time in human history, allows us that possibility.”

“A lot of this stuff isn’t rocket science,” Hames adds, discussing the science behind CBT. “It’s evidence-based common sense. It’s compelling and powerful in its simplicity. The critical thing is knowing how to titrate it and adjust it to yourself in a way that is evidence-based. That’s the challenge. And knowing what to trust. What is the right thing to be doing?

“There’s a lot of myths around a lot of these problems around sleep in particular — how many hours should I be getting? Even at a high level, let alone how should I fix the sleep problem?”

Big Health’s first product, a cloud-based digital service called Sleepio, sets out to cut through the sleep myths and digitally deliver an evidence-based CBT program for insomnia sufferers — using a slick and engaging wrapper that dresses what is, at bottom, a one-to-many self-help program in the clothes of a one-on-one therapy session.

The friendly face of Sleepio’s CBT course is a virtual therapist called The Prof — accompanied on occasion by his narcoleptic dog Pavlov — who steps the user through the program, sending personalised emails and SMSes to keep them engaged and on track with the remote delivery mechanism.

Sleepio

In essence, Sleepio is a talking therapy delivered algorithmically, based on user responses to sleep questionnaires — but designed in a way that feels personalised and engaging. The aim is to make a proven CBT program less arduous than trying to self-administer from a book, for example, and cheaper and therefore more accessible than a bona fide in-the-flesh therapy session.

It’s worth emphasising there are also human elements in Sleepio’s software as a service. Users get access to a community of fellow insomnia sufferers so they can access support and fellowship via an online forum. Users of the Sleepio forum accrue helpfulness points from others upvoting their contributions so the best advice and most helpful users rise to the top.

The startup also broadcasts sessions with (human) therapists out to their user community as a supplement to the automated CBT program. So it’s a combined model of human support and algorithmically aided self-help, all delivered digitally — with “wit and warmth”, as Hames puts it.

But can a talking therapy really be effective without there being an actual human therapist in the room? That’s the very keystone of Big Health’s business so it’s not leaving that question hanging. Hames points to a trial research paper the team published in 2012 to back up Sleepio’s claims.

The paper concludes, in summary, that “CBT delivered using a media-rich web application with automated support and a community forum is effective in improving the sleep and associated daytime functioning of adults with insomnia disorder”.

“We are seeing that all the clinical outcomes from our clinical trial — we conducted the world’s first placebo-controlled randomized trial for a digital sleep intervention — that showed that it’s as effective as face to face therapy. Seventy-five percent of even the poorest of poor sleepers were sleeping healthily again in a matter of weeks,” says Hames.

“On average falling asleep over 50% faster, spending 50% less time awake at night, and we’re seeing that those clinical effects are broadly echoed in a live community of users, like in the wild.”

Big Health has also publicly committed to a set of research principles, which includes — at the very top of the list — a commitment to “evidence-based practice”. Opening its protocols up to external review is also in there, along with a requirement to publish research outputs in “leading scientific journals, regardless of commercial interests”. The full list runs to 19 points.

When you are dealing with health and health data, you are trading in trust — so having a transparent and rigorous framework for managing user data is all the more important.

“This is an opportunity to build trust with people,” says Hames, when I bring up this point. “We will never sell your data,” he adds with emphasis. “Trust is so critical in this market.”

Returning to the effectiveness point, he also points out that CBT is always a collaborative process, between a therapist and the patient being treated. Sleepio likewise aims to arm the insomnia sufferer with a digital “toolkit” with which they can ultimately help themselves.

“The Prof is that single human voice who will help facilitate your journey through this process, and will tailor techniques for you and will tailor advice for you — but, it’s very clear, you are ultimately a collaborator and responsible for how you put this into practice in your life,” he says. “We give you a toolkit — it’s a very tailored toolkit and we give you support, from the community and from prompts to help you move through the program — but ultimately it’s you. And that’s absolutely deadly clear.”

We conducted the world’s first placebo-controlled randomized trial for a digital sleep intervention.

Hames is also very clear that in some individual cases taking sleeping pills may well be necessary, and that it is by no means Sleepio’s ambition to replace pharmaceuticals entirely. But he argues it’s also obviously true that drugs are not the only solution to complex behavioral problems like sleeplessness. For many people they are also not the desired option — ergo there’s room and appetite for another approach.

Yet with access to talking therapies remaining limited via traditional healthcare channels, because of the cost involved, this is where the vision for “digital medicine” comes in — i.e. using technology as a mass delivery medium for CBT programs so they can scale up to compete with pharmaceuticals, reaching and helping the many rather than the few.

“The opportunity is to help millions of people back to health who currently have no access to behavioral medicine,” says Hames. “We want to become the world’s first behavioral medicine company of a size and scale that can challenge big pharma. That’s the vision. And in the process there is an opportunity to transform healthcare, the way grassroots, primacy healthcare is delivered.”

“Digital medicine — we are the drug. We can directly augment and make more efficient. We can reduce the drug bill. We can actually solve people’s problems, alongside healthcare… It’s something that can augment existing care,” he adds.

How then is Big Health monetizing digital medicine — given that it’s absolutely committed to not sell users’ health data? Its service is a paid service, and the current focus is on selling timed access to its CBT programs to the b2b market, corporate and clinical — so both healthcare organizations and corporations looking for ways to promote staff well-being.

After all, as Hames points out, the effects of sleep deprivation go way beyond the personal angst of insomnia — to impact factors that corporations, industries and governments are directly concerned with, whether that’s productivity, safety at work, rates of disease, and so on.

And of course Big Health’s vision goes beyond its first focus on insomnia — with the potential to design and apply similar digital CBT interventions to offer a non-pharmaceutical treatment for other conditions and behaviors, whether that’s anxiety, depression or nicotine addiction. (Big Health has not yet made any firm decisions on other areas it will target in future.)

Over the past 18 months to two years, the startup has been conducting trials of its cloud-based system with organizations including private healthcare company Bupa, the Boots health and beauty retail brand, and small-scale pilots with the UK’s National Health Service (NHS). It’s also got a research partnership with Oxford University — and will be delivering Sleepio to students as part of that initiative, likely next year.

It’s in the process of signing up more customers and triallists, according to Hames — and has an open invitation to any clinicians wanting to test its system — but isn’t currently breaking out exact user numbers for Sleepio. He will only say they have clocked “millions of hours of sleep in the system”.

“In terms of our overall growth, because of our focus on clinical and corporate there’s going to be big increments in this,” he says. “Over the coming months… there will be big increments. If you think about Bupa [which has 22 million customers worldwide] — about the huge number of people they have access to. That’s where we’re going to start getting the really significant numbers. But already the data and the engagement activity is really good.”

Selling in to the NHS is obviously also something Big Health has big ambitions to do in future — but Hames says it’s not possible at the moment, given there’s currently no way for the NHS to procure digital solutions “in any kind of systematic way”.

Reform of that system to enable digital procurement is likely “years” out, in his estimation, not least because it would require a clear assessment system to be established so that doctors could be confident in prescribing digital offerings that have been benchmarked.

“I’m trying to get meetings with the health advisor to Number 10… There’s a notional willingness to drive this stuff forward. To be fair the NHS has a lot of stuff to sort out. And it’s a big challenge. They’ve got to get data sorted out first and foremost,” says Hames.

“We… are ready and waiting to help for the good of the population, to help work with the NHS to build a system that works, that is cost neutral or cost positive. That is operationally super lean and that has maximal impact on bottom line metrics. That we can demonstrate will improve care and save costs. I have that plan. We’ve built a plan as to how that can happen.”

In the mean time, Big Health is not hanging around waiting for government procurement processes to align with its business. Rather it’s turning its attention to the US where the healthcare market is not only bigger than the UK but structured differently, providing more immediate opportunities for a heath tech startup.

“We have a few things in the pipeline there — we’ve already signed up limited rollouts to some US corporations. And are also working with smaller medical centre level people in the US which is a slightly longer term thing. So we have to demonstrate again, before reimbursement, that this stuff works in practice,” he says.

More broadly, Hames argues that the general consumerisation of health — with the advent of consumer product launches like quantified health wearables and Apple’s HealthKit launch or Samsung’s offering there — also helps Big Health, which has partnered with Jawbone for its UP fitness tracker device, for example.

That said, its near term focus remains on the “tougher channels”, of clinical and corporate (rather than consumer) — which may take longer to break into but will deliver those “big increments” of users when they do open up.

“Some of the more enlightened companies are realizing that sleep is important for employees in terms of productivity. $63 billion, Harvard estimates, is lost every year in productivity to sleep in the US alone… So it makes economic sense for companies to address their sleep. And the ROI we can show is huge,” says Hames. “We’re currently throwing the net and trying to engage as many forward thinking companies as possible.”

The name for this part of the business is Sleepio at Work. It offers organizations of different sizes all you can eat access to the CBT program, plus add-on services which enables them to reach out to their workforce and segment it, based on need — identifying who actually needs core access to Sleepio’s CBT program or who perhaps only needs a single session with The Prof to tweak their sleeping habits.

Big Health also bundles in talks and webcasts from sleep experts, drawing on its advisory panel to supply the expertise.

Figuring out how best to deliver CBT programs into different workplace environments — to, for instance, transport workers who might rarely be at a desk vs traditional office workers who may rarely leave their keyboard — is one of the challenges it’s working on at the moment. It will also be building native apps for Sleepio, which is currently web-based only.

Hames says it’s letting the “market response” determine which industries to target and where the areas of biggest need are.  “But think of an area of your life that sleep doesn’t affect — there’s isn’t one,” he adds with the laugh of experience.