Outset Medical gets $76.5M to bring dialysis first to the 21st century, then to the home

By Jonah Comstock
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Outset Medical has raised $76.5 million in a series C round led by T. Rowe Price Associates. In addition to new investor T. Rowe Price Associates, existing investors Fidelity Management & Research Company, Partner Fund Management LP, Warburg Pincus, Perceptive Advisors and The Vertical Group also participated. This round of funding bring's the company's total funds raised to $185.5 million.

With its flagship product Tablo, Outset is focused on innovating just about every part of the practice of kidney dialysis, a method of artificially purifying blood in patients with kidney failure.

"We’re focused on bringing dialysis into the 21st century," CEO Leslie Trigg told MobiHealthNews. "There are a couple ways the dialysis industry looks a little bit more like the 1980s than 2017. Number one, it by and large is still a pencil and paper area of healthcare. Number two, the user experience both for patients and providers is served by technology that has not really changed in 20 or 30 years. If you think about the way that cars were designed and manufactured in 1980, imagine if the car you drove today hadn’t been updated since the 80s."

Tablo is a unit about the size of a minifridge, which already sets it apart from larger traditional dialysis machines. Unlike current machines that have to start with purified water, which requires a massive amount of infrastructure at hospitals, Tablo can bring in tap water and purify it as part of the process. It has also been completely redesigned to be easier and faster to set up and it contains a touchscreen which displays instructions, as well as education and entertainment content.

It's also connected. Outset recently recieved FDA clearance for a dialysis machine with two-way data communication. That means that not only can data on the treatment be sent directly to a patient's EHR, but information about the patient that a technician used to have to enter manually to calibrate the machine can now be uploaded directly from the EHR. The two-way transmission also allows for software updates as the technology improves. 

The company has attempted to identify and eliminate as many outdated parts of the dialysis process as possible.

"For example, one of the steps that’s really important in dialysis is making sure you don’t have any air bubbles in the dialyzer," Trigg said. "Today, the method of removing air involves the technician taking the dialyzer and banging it against the side of the machine. By contrast, we have designed a proprietary algorithm that automatically removes air from both the dialyzer and the blood lines. So we’re focused on the automation of steps and elimination of steps. We were able to eliminate over 50 percent of the steps involved in setting up a dialysis machine."

The end goal for this simplification is to have a machine operated not by a nurse or a technician, but by the patients themselves. This has already been partially realized: Although Outset needs an additional pending FDA clearance to make the device usable in the home, it has been set up in some dialysis clinics as an "in-clinic self care" offering, analogous to self-checkout stations in grocery stores.

"The consumerization of the complex has been done all over the place," Trigg said. "If you look at a space like diabetes management, that’s a great example of something that used to be very complex for the user and has been made much less complex through consumer product design. So [one] way we’ve really updated this is through a consumer product-like experience for the user, and that would be everything from the form and function of Tablo, specifically designing it so it doesn’t look like a dialysis machine, to the graphic user interface, using a lot of pictures and videos and simple animations to show people how to do it so you don’t have to memorize anything. ...  We really designed this 100 percent with the consumer in mind."

Outset Medical also offers two mobile apps to improve that experience: a patient training app and a provider app that contains all the documentation on the device. A third app is in development.

"We are in development of a patient app that will transmit a more basic snapshot of the treatment data that’s flowing out of Tablo out to the cloud, and send that back to the patient," Trigg said. "Because today patients don’t get any information at all about their treatment. How did it go? Did all the toxins get removed at the right rate and in the right amount? We aim to give patients a lot of information. All this is part of putting them in the driver’s seat of their own care."

The company will use the funding to ramp up manufacturing, expand its sales and support teams, and complete more clinical trials. At least one additional trial will be required to get the clearance needed to bring the device into the home.

"The opportunity we see is to leverage the best of software and data analytics to open up the envelope on where, when, and who can dialyze at the end of the day," Trigg said. "In addition to transforming the device, we’re aiming bigger than that. We’re really focused on technology-driven service innovation. How do we use new tech, not just because it’s newer and cooler and better, but because it can serve a larger purpose? And that purpose is both cost reduction, which is very acutely needed in the dialysis space for providers, but also — for the half a million people on dialysis — we see a future for a very different patient experience, one that really puts the patient in the center and lets them to control it and own it in ways that have been shown over and over again, in other areas of medicine, to provide better clinical outcomes over time."