Oventus sleep device tries breaking out of crowded sector, can it clear trial and marketing hurdles?

CAN a Brisbane sleep-device company crack it overseas? A lot of investor money is riding on it.

Dr Chris Hart, of Oventus. Photo: Claudia Baxter.

Chris Hart has his name and wealth invested in a mouthguard-like gadget sitting on his desk. It’s the medical device that big money didn’t want.

It’s a tool supposed to help people with trouble sleeping, from chainsaw snorers to 3am wakers.

Rockhampton-born Hart, 43, developed the device as a dentist while at a coffee shop on a 2012 trip to Mount Isa, where he was overseeing two clinics he ran among a chain.

Hart was a troubled sleeper himself.

“I was fairly high nasal resistance,” he explains. He takes a deep sniff and sounds half-blocked up. Surgery as a child to bore out his nasal tubes didn’t work. Neither did traditional devices, such as masks to force open airways.

While at the coffee shop, he grabbed bendy straws and stuck them outside his teeth. “I thought, ‘Maybe I can breathe through that’. So I went back to the dental practice and I got some of the bendy saliva injector tubes and I cut them up,” he says. Add some polymer, jimmy it up, whack it in the mouth and that night he slept. “It worked,” he says.

The question now is whether his company Oventus, and its device, can work where some life-science companies have stumbled. Among barriers are shelves full of competing products and limited evidence to prove the device’s effectiveness. But the flip side is Oventus argues its device has unique benefits that will break it out from the competition.

‘KEEP YOUR CHUNK OF PLASTIC’

Oventus was born when private equity bought out Hart from his dental chain, Life Time Smiles, in 2013. His sleep device was not sold. “I thought, ‘This could have some legs, I’m not selling that’,” Hart recalls. “They actually laughed at me when I said that (and were like) ‘sure, keep your chunk of plastic’.”

Too young to retire at 40, he and chief executive Neil Anderson, a life-science sector veteran, concentrated on developing the device. The company started small, operating out of room for $30 an hour, and they sold about 300 devices initially.

Oventus has since raised $12 million for its stockmarket listing and has a couple of dozen staff at a crowded office on Brisbane’s westside, with posters saying things like TEAM (Together Everyone Achieves More).

But that doesn’t equal success and history shows some scarring tales. Among the failed are Logan-based Occupational & Medical Innovations, maker of devices such as a retractable needle-syringe. It went broke on New Year’s Eve 2009 after investors poured in $40 million.

TRICKS TO GETTING INTO THE US

They’re trying to crack the US market and that’s no easy task. Companies need to consider issues such as trials and insurance reimbursement for patients using the device.

Stuart Hazell, of life-sciences consultancy Fusidium, says that for the sector in general Americans prefer to have insurers or government pay for treatments. But as Hazell points out, insurers want evidence that paying for a device benefits customers while being economical. And trial data is important for proving health-economic benefit, he says.

An Oventus device.

Oventus so far only has data from two trials on 33 people. Hart acknowledges more data is needed, and says new trials are under way.

The company will also look at distribution deals and he says Oventus can use existing US insurance codes, with consumers reimbursed an average of 50 per cent to 60 per cent of costs. That may help but the device is costly, retailing in Australia for between $1800 and $2500.

The goal is big. Research agency Technavio tips the world market for sleep disorder devices will rise from $1.37 billion in 2015 to $US1.71 billion in 2020. But there’s already a mainstream treatment for sleep problems, CPAP — it looks like a fighter-pilot’s mask — while other devices include ones designed to push someone’s jaw forward.

A LOT OF RIVALS

Oventus argues its product uses a special patented airway that taps a missing market. That market is for people who cannot tolerate the mask, but whose sleep troubles are so severe that jaw-stretching devices fail.

Still, doubts remain about Oventus’s readiness. “It’s a very competitive field and building distribution channels is key, which cannot be underestimated,” one industry source says.

Things also go wrong, with Oventus in February recalling 191 devices after customers returned 12 faulty parts. Oventus said it represented a small percentage of the thousands of devices made.

For the product itself, of 16 customer reviews on Oventus’s Facebook page, 12 are positive. “Just life changing!” says one comment. Another user complained her snoring had not improved in several days — although Oventus argued that some adjustment might be required initially.

The company last year lost $2.3 million but has attracted more than 700 investors, including an entity linked to renowned Melbourne-based investor Alex Waislitz owning a 7 per cent stake. Some big money is now backing Hart’s device. The trick for them is making sure the investment is worthwhile.

* This story ran in QBM, the monthly business magazine coming in The Courier-Mail.

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