Scouting Report-AppliedVR: Tackling Pain & Anxiety...Virtually!

The Driver:

AppliedVR recently raised $36 million from F-Prime Capital, JAZZ Venture Partners, Sway Ventures, and SVB Ventures bringing the company’s total funding to $71 million. The L.A.-based company plans to use the investment to conduct more clinical trials, launch EaseVRx’s in the market, and expand to other areas. AppliedVR uses virtual reality technology for managing chronic pain, acute postoperative pain, and anxiety. The company’s technology consists of a virtual reality headset with visual and audio programs that deliver cognitive behavioral therapy for treating pain conditions. To date, AppliedVR has conducted clinical trials on over 60,000 patients in 240 hospitals and 1,500 patient homes to help patients ease acute pain either during or after surgery.

Key Takeaways:

• According to Modor Intelligence, the pain management market was valued at approximately $65B in 2020, and is expected to grow to $87B in 2026, a 4.85% CAGR.

• 66% of the patients who watched VR programs reported at least a 30% reduction in pain

• Chronic pain affects nearly one-third of Americans and has a total cost about $635 billion each year

• According to the CDC, on average, 115 Americans die daily from opioid overdoses.

The Story:

According to CEO and founder, Matthew Stout, AppliedVR was originally created as a tool to facilitate a better understanding of human decision-making by LRW at a top market research firm. After meeting with top VR researchers, Stoudt gained a better understanding of the role of virtual reality in helping people deal with their behaviors, emotions, and decisions. His realization of VR’s potential as a powerful cognitive tool gave rise to the idea of deploying it in dealing with anxiety, chronic pain, and depression. AppliedVR is useful for alleviating all manner of pains, from labor pains during childbirth to the discomfort experienced by patients undergoing cancer treatment.

Using the company’s technology, virtual reality creates a 3D environment using a combination of advanced software, hardware, and design. Users can interact with the environments displayed in the VR headsets and engage with different visuals, sounds, and even sensations. The AppliedVR set comes with a Samsung smartphone, a Samsung VR device powered by Oculus, a headset, cables, and instructions. The VR content consists of a set of pre-installed medical apps, games, and animations, so once the user turns on the headset, they can start to use the system immediately. The smartphone’s use is limited to checking out the VR app on the phone or accessing Wi-Fi.

Research has shown that people who use VR therapy have decreased levels of pain activity in the five regions of the brain associated with pain. The company notes that Dr. Brennan M. Spiegel and his research team at the Cedars-Sinai Medical Center have worked with AppliedVR for years and treated hundreds of patients with VR therapy. A study conducted by Dr. Brennan’s team to assess pain levels using VR found that the use of VR on hospitalized patients significantly reduces pain compared to a control distraction condition. Furthermore, an experiment in an article entitled “Virtual Reality for Management of Patients in Hospitalized Patients: Results of a Controlled Trial”, concluded that patients had a 13% drop in pain scores of 100 patients that watched a 15-minute nature video with mountains, running streams, and soothing music in the background. AppliedVR treats chronic pain by ​​capturing the mind’s attention and blocking pain signals from reaching the brain. The tactile and sensory feedback produced by AppliedVR’s system signals the patient’s neurotransmitter mechanisms that reduce pain.

AppliedVR is currently working with Medicaid, Medicare, and other insurance networks for reimbursement, but they are yet to set any pricing plans.

The Differentiators:

Similar companies like Vicarious Surgical have FDA breakthrough status just like AppliedVR’s technology. However, Applied VR’s EaseVRx product is the first and only FDA-approved at-home virtual reality pain treatment used to treat chronic lower back pain and fibromyalgia and sets AppliedVR apart from comparable organizations.

The FDA gave EaseVRx a “breakthrough device designation” for treating fibromyalgia and chronic lower back pain. The breakthrough device designation speeds up the development and review of new medical devices. In developing EaseVRx, AppliedVR conducted an important clinical study of 179 participants with chronic lower back pain that helped it to get FDA approval. Half of the participants were given an EaseVRx headset to watch immersive 3-D programs daily for 8 weeks and the other half were given headsets to watch routine nature scenes as a placebo. At the end of treatment, 66% of the patients who watched VR programs reported at least a 30% reduction in pain, compared to 41% of the patients in the placebo group.

The Big Picture:

Chronic pain and chronic pain management have long been an issue in the U.S. For example, according to Modor Intelligence, “the pain management market was valued at approximately $65B 2020, and it is expected to grow to $87B in 2026, with a CAGR of 4.85% over the forecast period. In addition, in the US, the misuse of prescription pain medication has led to an opioid overdose crisis. According to the Center for Disease Control and Prevention, the annual economic burden of prescription opioid misuse in the United States alone is approximately $78.5 billion. The estimated amount includes healthcare costs, addiction treatment, criminal justice involvement, and lost productivity.

AppliedVR’s technology offers an alternative to chronic pain management while eliminating the need for prescription pain medication and instances of misuse. Apart from AVR’s potential in averting the opioid overdose crisis caused by pain prescription misuse, it is also more cost-effective. According to a Journal of Managed Care & Specialty Pharmacy study, the total cost of prescribed pain medication in the US is $17.8 billion. It also eliminates the need for costly and painful surgeries because VR therapy is a non-invasive treatment.

In terms of inclusiveness, AppliedVR is user-friendly for people with disabilities because it is a hands-free device. Consequently, a wider range of patients, especially patients with limited mobility, can utilize and benefit from AppliedVR therapy.

Notwithstanding the benefits of AppliedVR, there is still room for improvement. In the EaseVRx clinical trial, about 20% of participants reported discomfort with the headset and nearly 10% reported motion sickness and nausea. While these are common side effects from using VR headsets, it is worth addressing to improve the user’s experience. AppliedVR might help several people manage their chronic pain and anxiety with the proper training, price adjustments, and improved technology.

AppliedVR Raises $36M, Pursues FDA Clearance of First Digital Therapeutic, AppliedVR scores $36M for Virtual Reality Pain Management. AppliedVR’s EaseVRx scores FDA De Novo Clearance for Treating Chronic Lower Back Pain