Simergent November 11/18/2018

What is dialysis?

Dialysis is the process of removing excess water, solutes, and toxins from the blood in people whose kidneys can no longer perform these functions naturally. The process is also referred to as renal replacement therapy which had a market value of $87 billion in 2016 and is expected to grow to $119 billion by 2023. Baxter International (NYSE: BAX), for example, generated $910 million in the 3^rd quarter alone from renal care or about a third of the quarter’s total company revenue. A significant and growing area of interest for many healthcare companies as they look to gain access to new markets where they can sell dialysate solution, solution bags, disposable tubing, and other component products for the dialysis process. 

So how is dialysis performed?

There are two processes for performing dialysis, 1) hemodialysis and, 2) peritoneal dialysis.

1)      Hemodialysis is typically performed in hospitals or clinics, 2-3 times per week, and involves tubing the blood outside the body where it’s filtered and cleaned before being returned back into the body. A time consuming process that involves needles, expensive equipment, and many inconvenient trips outside of a patient’s comfort zone.

2)      Peritoneal dialysis can be performed in-home while a patient sleeps and involves the blood being cleaned inside the body. A special fluid is put into the abdomen to absorb waste from the blood that passes through small vessels in the abdominal cavity. The fluid is then drained away. A less time consuming process that doesn’t involve needles and is significantly more convenient/accessible to a broader number of patients.

Automated peritoneal dialysis addresses accessibility issues by allowing patients to perform dialysis from their homes but the currently available devices to support the process are proving too costly in emerging markets or, more specifically, markets outside of the US and Canada. 

Why Simergent?

Former University of Oklahoma graduates and Simergent co-founders, Steve Lindo and Rick Pendergraft Ph.D., are developing an at-home automated peritoneal dialysis device that focuses on specific needs for emerging markets where current devices, like Baxter’s HomeChoice system, remain unused because of costs in excess of $18,000 between the device and recurring need for disposable component parts.

At a target price of $5,000 per unit, Simergent’s device is designed to be 72% less expensive than traditional home devices, allowing the home nocturnal dialysis market to save millions in healthcare costs, while delivering safe and effective therapy. It’s also more intuitive and easy to use through modernization of the user interface. The global peritoneal dialysis market, as a segment of all dialysis, generated $3.3 billion in 2017 and is expected to grow north of $5 billion by 2025. Peritoneal Dialysis (PD) is growing at 20% per year in certain emerging markets as countries realize the cost savings potential and quality of life benefits of automated peritoneal dialysis over hemodialysis.

Steve and Rick have known each other since 1996, having worked together at OU. They collaborated on a consulting project for Baxter in 2011 to help with a “big data” database mining project around Baxter’s HomeChoice peritoneal dialysis device (mentioned above). They began working together on the Archimedes automated peritoneal dialysis system project in 2014 and eventual setup Simergent in 2016 recognizing the opportunity before them.

Simergent is part of the Chicago Innovation Mentors (CIM) program and the MATTER incubator, both of whom provide mentor assistance. Two of the company’s CIM mentors include a former Baxter marketing Vice President and European Operations Vice President… seeing the recurring themes with Baxter yet? Additionally, they have mentors that include nephrologists from the US, India, China, Mexico, and a peritoneal dialysis nurse from Brazil, all of whom are widely published Key Opinion Leaders regarding peritoneal dialysis.

Steven Lindo began his career as a mechanical systems engineer with Raytheon where he developed liquid cooling systems for military surveillance aircraft. After 5 years, he joined Baxter International (NYSE: BAX) as a systems engineer for their automated peritoneal dialysis device. Lindo left Baxter 3 years later to start Sim Solutions, a consulting company, and continued consulting for Baxter for another 4 years during which time Baxter made him Chief Engineer for their automated peritoneal dialysis platform. 

Dr. Rick Pendergraft graduated with a BS, MS, and PHD from the University of Oklahoma and has worked as a software developer for Advanced Financial Solutions, Metavante, and Fidelity National Information Services. Rick started a software consulting business, eGravity, in 2005 where he and his co-founders developed software for the regulated insurance industry. Rick lives in Norman today and is utilizing his deep experience developing products for regulated industries to develop the software and circuit boards for Simergent’s device. Lindo is designing the mechanical and disposable components.