© Somatix 20171

HARNESSING THE POWER OF ARTIFICIAL INTELLIGENCE AND MACHINE LEARNING TO IMPROVE CLINICAL OUTCOMES

Charles K. Herman, M.D., M.B.A.November 2018

• M.D. with Distinction in Research, Summa Cum Laude• Albany Medical College, Albany Medical College, Albany, NY

• M.B.A. with Honors, Palmer Scholar• Wharton School of Business, Philadelphia, PA

• Residency• Plastic and Reconstructive Surgery, Albany Einstein College of

Medicine/Montefiore Medical Center, New York

Background

2

• Chief Medical Executive• Lehigh Valley Health Network

• Advisor• Covance• GLG• Somatix• Synexis• Several PE/VC firms

• Cofounder• Bioventurion: bioactive “intelligent” implant design

Background

3

• Editor of four medical textbooks

• Grants: Howard Hughes Medical Institute, National Science Foundation

• Research• Photodynamic cancer therapy

• Pulsed electromagnetic fields

• Infection control

• Bioactive implant materials

• Artificial intelligence/machine learning

Academic Activity

4

• Advisor to Somatix

Disclosure

5

• Founded: Feb 2015 (Delaware, US)

• Employees: 22 (19 R&D) as of July 2018

• Investors: Digitalis Ventures (NYC) and private investors

• Round of investment:

• April 2015 $1.5M Seed

• April 2017 $5.5M Round A

• Offices

• HQ NYC, USA

• R&D Raanana, Israel

Somatix at a glance

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AGENDA • How Digital Health is transforming the healthcare

landscape

• Key Digital Health attributes

• How it works – success stories

• Remote Patient Monitoring – the shift from reactive curing

to proactive real-time care

• Solutions worth watching

• Use cases and early clinical data

“Owing to digital advances, we’re experiencing a reimagination of health care delivery. Consumers are now empowered to take more control of their own health information to make better informed decisions about their medical care and healthy living. These advances enable better health outcomes for patients.”

September 12, 2018

FDA Commissioner Scott Gottlieb:

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• Global digital health market was valued at approximately USD 122.66 billion in 2017

• Is expected to generate revenue of around USD 423.11 billion by the end of 2024

• A CAGR of around 19.35% between 2018 and 2024

Digital Health: Facts and figures

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Source: Zion Market Research, July 13, 2018

Digital Health is the intersection of

The core elements of a solid Digital Health Infrastructure

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HealthcareBig Data

IoT(the Internet of Things)

AI & ML

Wearables

Wearables, Internet of Things, mobile health platforms and artificial intelligence are quickly expanding into all areas

of patient monitoring and disease management

The building blocks of healthcare transformation

11

IoT(the Internet of Things)

Allows connected, remotely managed healthcare bringing greater accuracy to patient diagnoses, ongoing monitoring and medical caregiving

AI & ML Simulates human decision-making, providing - on demand - rich and relevant information to healthcare providers, utilizing real-time and predictive analytics

Big DataFacilitates high-volume, high-velocity and high-variety data, creating cost-effective, innovative forms of information processing for enhanced insight and decision making

WearablesEnables a new crucial information aggregation channel utilizing sensor-rich wearables to automated collection of vital, previously untapped, data

• A digital intensive behavioral counseling program focused on reducing costly chronic disease in employer and health plan populations

• The largest provider of digital diabetes prevention programs

• Total funding (Seed + 3 rounds) $126.5M

Market acceptance: Successful digital health companies

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• A combination of consumer health technology, personalized recommendations, and real-time support at the point of impact

• Providers of real-time, personalized insights and support to make diabetes management easier

• Total funding (Seed + 5 rounds) $240M

• A neuroscience research company that provides online brain training programs

• Made brain training accessible to anyone, anywhere, anytime

• Total funding (5 rounds) $67.5M

Market acceptance: Successful digital health companies

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• A combination of care team that guides patients through their respective care journeys, 24/7 telephone access to healthcare providers, same- or next-day appointments for acute appointments, and on-site labs, as well as online access to their medical records

• Total funding (5 rounds) $223.3M

What does it take to build a successful tech company

• Originality - coming up with a unique, innovative idea

• Leadership - being the first to market

• Competence - transforming broad concepts into practical, profitable business models

Digital Health: Essential ingredients to success

14

Applications of AI

Source: Harvard Business Review, May 201815

Remote Patient Monitoring makes use of digital technologies to collect relevant health-related data and transmit them to a healthcare provider:

• Allows real-time access to personal data – anytime, anywhere

• Slows disease progression by facilitating faster diagnosis and early detection of deterioration

• Increases medication adherence, treatment efficiency and improves overall patient satisfaction

• Reduces hospitalizations, readmissions and prevents avoidable hospitalizations

• Relevant caregivers are: Clinics (customers) Aging-in-place facilities (elderly people) Hospitals (discharged patients) Operators of Employee Benefits Programs Health Insurance companies

RPM: Healthcare 2.0

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• The global remote patient monitoring solutions market is anticipated to reach USD 48.5 billion by 2024 from USD 17.0 billion in 2016, growing at a CAGR of 14% during the forecast period

• North America accounted for 35% share of total remote patient monitoring solutions market in 2016 and is expected to dominate over the forecast period of 2016 to 2024

• Home healthcare segment is expected to occupy 25% market share by the end of 2024

RPM: Market size

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U.S. mHealth market by service (USD Million), 2012 – 20203

Source: Global Remote Patient Monitoring Solutions Market Outlook 2024: Global Opportunity And Demand Analysis, Market Forecast, 2016-2024Goldstein Research 8/17

• 15-25% of patients discharge from hospitals are readmitted with 30 days

• Congestive heart failure and chronic obstructive pulmonary disease are two most common diagnoses leading to readmission

• Readmission rates for CHF and COPD are as high as 26% in some studies

Hospital Readmissions

Source: Center for Healthcare Quality of Payment Reform18

• Complications arising directly from the inpatient care (e.g., surgical site infection)

• Poor transition of care (e.g., poor medication compliance, poor fluid intake, falls)

• Exacerbation of chronic condition (e.g., asthma, CHF, COPD)

Reasons for readmission

Source: Center for Healthcare Quality and Payment Reform19

• New CMS RPM CPT code unbundling• CPT 99091

• Introduced in 2002 but bundled until 2018• $59 per episode

• Requirements• Advance Beneficiary Consent.• One Face-to-Face Visit per Year.• 30 Minutes of Time in 30 Day Period.• Physician or other Qualified Health Professional.• Use with other care/monitoring services/codes.

• Readmission penalties• Readmissions cost Medicare $26 billion per year• Average cost to a hospital is $18,000 per patient in unreimbursed care

Value Proposition

Source: Center for Healthcare Quality and Payment Reform20

An introduction ofan innovative, digital health‘game changing’ company

“Somatix takes the activity tracker from an athletic option to a clinical imperative”

John Nosta

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Utilizing sensors built into smartwatches

and smartbands

Completely automated monitoring –

no user effort required

Precise recognition of a range of physical and

emotional states

Behavioral change via personalized

intervention

A provider of real-time wearable-assisted gesture detection Remote Patient Monitoring (RPM) platform

for cost-effective healthcare and wellbeing enhancement

Redefining remote monitoring for better healthcare

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I. Real-time, device agnostic, automated gesture detection software platform

II. Adaptive machine learning III. SERF™ (Social, Emotional, Rational,

Financial) personalized motivation engine

InterventionClinically actionable data

Addictions Elderly care & discharged patientsActivities of Daily Living (ADL)

Neuro-diseases &movement disorders

Optional use cases – a differentiated approach

Automated precise recognition of a range of gestures

24 © Somatix 2018

…walking, sleeping, shaving, taking medication

Drinking (cold/hot)Eating Smoking

Tooth brushing

Accelerometer Gyroscope Heartrate GPS Barometer Electrodermal activity Skin temperature

Leveraging sensors in commercial off-the-shelf wearables

A device-agnostic technology

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“The motion detecting sensors in these devices generate an enormous amount of data, and if analyzed correctly, this haystack of information can yield all sorts of actionable insight” Alfred Poor

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HIGHLY INTUITIVE SOLUTIONS FOR PASSIVE MONITORING OF PATIENTS ACROSS THE CONTINUUM OF CARE

SafeBeing

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Requires no sensors or cameras to be installed in the users’ environment

Falls

Sleeping habitMobility

Missedmeals

Low liquid consumption

Medication adherence

Neurological malfunctioning

Deliversinformation on a range of behavior indicators, real-time alerts and notifications providing caregivers with immediate awareness of any change in behavior or other abnormality

Automated remote monitoring of elderlies,discharged and chronic patients’ ADLs(Activities of Daily Living), to continuouslydetect their physical state

Wandering

Smoking

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Senior citizens

make up 13%of the U.S. population,

yet account for

34% of healthcare-

related spending.

More thana third of all

adults aged 65 or older suffer from

falls each year.

Between

2015 and 2050,the proportion of the world's

population more than 60 years old will nearly double,

from 12% to 22%.

By

2020,the number of people aged

60 years and older will outnumber that of

children younger than5 years.

Source: WHO

Elderly care market facts and figures

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MEDICATION INTAKE

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DRINKING

SafeBeing: The caregiver’s view

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SafeBeing: The caregiver’s view

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SmokeBeat: Delivering the two-pronged approach“Behavioral strategies can help, medicines can also help, but what’s best is a combination of both”*

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Automated gesture detection of smoking episodes

Generating personalized CBT (Cognitive Behavior Therapy) interventions utilizing Machine Learning and Big Data analytics

Informative dashboard provides awareness of the treatment’s progress and enables reimbursement through remote counselling CPT codes

Real-time delivery of personalized messages and incentives to increase smoking cessation treatment adherence and effectiveness

*Source: Harvard Health Publication, Feb 2, 2018

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1.1 billion tobacco users

worldwide.This figure is

expected to rise to

1.6 billion.

1 person dies every

6 seconds from a tobacco-related disease.

Approximately

6.2 trillion cigarettes smoked worldwide in 2014.

Cigarette consumptioncontinuously on the rise.

Source: ash.org

100 millionpeople died from tobacco-related

diseases in the 20th centurywithout any action taken.

1 billionpeople may die from tobacco-related

diseases in this century.

Smoking cessation facts and figures

SmokeBeat: The clinician's view

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SmokeBeat: The clinician's view

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SmokeBeat: Treatment effectiveness

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The SmokeBeat app

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Providing real-time personal interventionUnderstanding smoking patterns

• An Android and iOS compatible Somatix’s proprietary wearable

• Built-in sensors: accelerometer, gyroscope and step detector

• Full autonomous operation: Gesture signals acquisition

Locally saved data

Wireless connectivity with the mobile app (within range)

• User interface includes: LED light indicators

Haptic feedback vibrations

A push button

• Battery designed to last 3 days between charges

• Bluetooth Low Energy (BLE) communication used as a gateway to the cloud

Somatix’s smartband: It is all in our hands

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Value added across 4P’s of healthcare

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PATIENTS

Grants a greater control over course of treatment and improves health outcomes and quality of life

PHYSICIANS

Allows access to a wide array of data and risk-related alerts for real-time clinical decision support based remote diagnostics

PROVIDERS (clinics)

Boosts treatments adherence and efficacy, decreases hospitals readmissions and improves care, at a lower cost

PAYORS (insurers)

Enables dynamic pricing with overall enhanced satisfaction through personalized health benefits programs

Academic validation: Nicotine and Tobacco Research

© Somatix 201841

Effect of Real-Time Monitoring and Notification of Smoking Episodes on Smoking Reduction: A Pilot Study of a Novel Smoking Cessation App

Prof. Reuven DarSchool of Psychological SciencesTel Aviv University, Tel Aviv, Israel

Results/Findings – smokers in the experimental condition showed a significant decline in smoking rate over the 30-day trial (p < .001). There was no change in the smoking rate of the control group.Conclusions – These preliminary results suggest that automatic monitoring of smoking episodes and alerting the smoker in real time may facilitate smoking reduction in motivated smokers.

Reported Cigarettes per Day by GroupF(1, 38) = 7.99, p =. 007

Vertical bars denote +/- standard errors

Experimental

ControlDay 1 Day 30

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8

10

12

14

16

18

20

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Cig

are

ttes p

er

Day

Academic validation: Journal of Smoking Cessation

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Results/Findings – Once technological issues were controlled for, SmokeBeat’s detection rate significantly improved, resulting in 100% detection rate.Conclusions – SmokeBeat’s ability to detect smoking events in real time presents an opportunity for a proactive and interactive smoking cessation aid—a potentially useful tool for individuals attempting to quit smoking.

Using ‘Smart’ Technology to Aid in Cigarette Smoking Cessation: Examining an Innovative Way to Monitor and Improve Quit Attempt Outcomes

Professor Sean BarrettDepartment of Psychology & Neuroscience, Dalhousie UniversityHalifax, Nova Scotia, Canada

THANK YOU!Selected by:

October 2017: Somatix Wins 2017 Market Disrupt, as part of the 9th Employer Healthcare & Benefits Congress (EHBC)

Academic studies:

June 2018: Winner of the prestigious RED HERRING TOP 100 North America award

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