A Breath of Fresh Air

The old saw about necessity being the mother of invention holds special significance for Bhairavi Parikh. The founder of Apieron (Menlo Park, CA) is a wife and mother with two family members who suffer from asthma. Her company was born, if you will, of Parikh's desire to help her husband and others, including her daughter, who are coping with the chronic lung disorder.

“The advent of the company was a personal experience for myself,” Parikh says. “My husband actually had severe asthma growing up, and I've known him since he was quite young.” Their daughter, 11, suffers from uncontrolled symptoms of the disorder as well.
As the leader of the instrumentation team for medical device clinical studies at the University of Massachusetts' Division of Cardiothoracic Surgery, Parikh was in a position to bring some relief to her family. Her goal was to find a “better way to manage asthma by measuring inflammation in the airway.” She eventually designed and developed a biosensor that detects selected analytes such as exhaled nitric oxide (eNO), a common indicator of airway inflammation.
Glucose Monitor As Model
“We learned very much the hard way how much medicine needs something quantitative to provide therapy,” notes Parikh, who launched Apieron in 2003 with an initial round of $4 million in venture funds.
The result of her work is the Insight eNO System. Developed for the doctor's office, the noninvasive monitor provides eNO results in less than one minute, according to the company, by detecting trace amounts of nitric oxide molecules in a single breath.
The diagnostic device received FDA approval in March 2008 and began shipping to doctors' offices the following month.
Taking the home glucose monitor as its model, Apieron is now developing a consumer version of the Insight and has brought on board several women executives with backgrounds in the glucose home monitor market and medical device company investing. Holly McGarraugh, president and CEO, is the former vice president of worldwide marketing for in vivo products at Abbot Diabetes Care, where she oversaw the commercialization of continuous glucose monitoring.
Wende Hutton and Jennifer Scott Fonstad have also signed on with Apieron as board members. Hutton has been a general partner with Canaan Partners since 2004. Over the past 15 years she has helped bring more than 11 new medical devices, drugs, and diagnostic kits to market. Hutton has also been involved in IPOs for five companies. Fonstad is managing director of Draper Fisher Jurvetson (DFJ), which she joined as a Kauffman Fellow in 1997. She became a partner in DFJ in 1998. Her investment history includes QuickHealth, Athenahealth, and Lumenos, which was acquired by Wellpoint.
Signals Say ‘Go'
McGarraugh says the timing is right for a consumer asthma monitor. “All the signals say it's the right thing to do.” Physicians in particular say “they're waiting for a good home device like the glucose market device.” Apieron has also received nods from “end-users who are contacting us wanting to know if they can obtain the device. All the pieces are there to make that happen.”
McGarraugh says there are medical and business parallels between the glucose monitor market and the potential market for a home asthma monitor. The Insight eNO System measures inflammation in a patient's breath, while a glucose monitor measures glucose levels in a small blood sample in order to help people with diabetes “know the right amount of medication or food to take in or not take in.”
Untreated asthma exhibits elevated levels of eNO. Anti-inflammatory medications such as inhaled steroids reduce the inflammation and confirm that the patient is following her treatment plan. Nitric oxide levels increase as inflammation increases and decreases as inflammation decreases.
A $7-Billion Market?
With 26 million asthma sufferers in the United States, Apieron believes the potential total market is in the “$7-billion range,” McGarraugh says. She thinks the initial market, which would include families with severe asthma and pregnant women, is “more like $1 billion to $2 billion.” One-third of people with asthma “have severe and chronic conditions,” McGarraugh says, and 2 million persons annually end up in emergency rooms with asthma attacks. “Their families want something to keep them out of the emergency room.”
Making the successful transition from the doctor's office to the home requires keeping physicians on board, “because they are taking care of patients and changing therapy recommendations based upon eNO levels,” McGarraugh says. She learned from her glucose home market experience that “physicians are your constituents, advocacy group, and distributors.” The CEO adds: “There is no one core group when you get into the retail market. You really have got numerous customers, including managed care organizations. You have to handle all those customer segments well, develop excellent relationships, and provide superior products and services.”
The Insight eNO System measures 6 ¾ x 14 x 8 ½ in. and weighs 8 lb. Obviously, the home monitor will be smaller. “What we are planning,” McGarraugh says, “is that it have a very small footprint” for use on countertops. “It would just be another item in your bathroom or bedroom. The screen would have to be smaller because of the smaller footprint.”
And the cost? That's not been determined yet. The doctors' monitor costs “several thousand dollars,” McGarraugh says. She notes that glucose monitors cost $500-$600 when they were introduced and gradually came down in price through volume sales and the usual manufacturing improvements.
‘Mothership-Pod' Concept
“I anticipate that we will follow the same path,” she says. “We believe the ability to transfer data to a physician is going to be an important part of an asthma practice, so that end-users can have an asthma management tool transfer data to the doctor, who has a more sophisticated device for analysis. It's a mothership-pod idea.” McGarraugh says Apieron expects to have the home product—which like the office model will be manufactured in Menlo Park—ready by late 2011.
Parikh says the experience of receiving FDA approval for the office asthma monitor will help as Apieron develops the home device. “We actually are in a little bit of a different spot than the diabetes [monitor] industry,” she notes. Because FDA was not familiar with the technology, Apieron had to undertake “a bit of an educational process” with the agency and to make sure that the company was interacting with FDA “early and often. It really helps to create a relationship with them so that you're not blindsided. We're going to take the same tack with the home product.”
In June Apieron heard some good news on both the financial and clinical fronts. The privately held company received an undisclosed amount of Series D funding commitments from all its previous investors. That list includes Alliance Technology Ventures, Canaan Partners, DFJ, and Onset Ventures. And a panel at the American Thoracic Society's annual meeting reported that adults and children being treated using eNO measurement “have seen a significantly positive impact,” Apieron notes. Panelists also reported that “numerous academic studies support these clinical observations.”
Company Mom
In a perfect world perhaps the success of a medical device company piloted by women would merit only passing comment. McGarraugh says being a female chief executive has provided neither advantages nor disadvantages. She describes herself as having “a very female personality” with “a sense of strong, interactive caring skills. It's how I define myself, and I think that has more to do with it and not so much [that I'm] female. It might be the social norm that allows women to express that a little more comfortably than a man would.”
But she has no “horror stories” about working in a “male-dominated” industry. “Silicon Valley is quite used to woman who are talented being able to make a difference and go up the ranks just like men,” McGarraugh says.
Apieron's founder says her experience as a female executive differs somewhat from that of the company's CEO. “When we started I had just delivered my fourth child,” Parikh says. She was pregnant when she began courting the financial venture community “and had a lot of interesting conversations with potential investors in terms of whether or not I would be capable of leading an organization or leading a technical group.” At the time there were “not a lot of women in technology, not a lot of moms starting companies.”
Still, the strength of her technology and passion for her concept carried the day and led her to find investors “who believe in you and in your passion,” Parikh says. “We really hit a home run in finding the right investors. In fact, both of our first investors were men.”

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