Medtech company Chordate Medical has recently received an order for the rhinitis treatment from the private healthcare company Nahdi Care Clinics in Saudi Arabia. The company expects more orders for the product system, both from private and publicly owned hospitals. In addition, the company’s distributor, Janin Medical, is working to obtain market authorisation for Chordate’s migraine treatment.
Chordate Medical has developed Kinetic Oscillation Stimulation (K.O.S), a nerve stimulating treatment technology for chronic migraine and chronic nasal congestion (rhinitis). The company’s products are currently available in the Nordic countries, Germany, the UK, Italy, Israel, and Saudi Arabia.
Established business model in Saudi Arabia
Saudi Arabia is one of the markets in which Chordate has been active for the longest time. Already in the end of 2020, the company received an insurance code which means that patients with private health insurance can have all or part of the cost paid. About a year later, the first insurance-reimbursed K.O.S. treatment for rhinitis was carried out.
Rhinitis – a major health problem
Rhinitis, chronic nasal congestion, is a big health problem in Saudi Arabia due to air pollution in major cities, high incidence of mites and mold spores, combined with alternation between high outdoor temperatures and cold indoor environments.
In addition, excessive long-term use of nasal spray is a common problem. Therefore, the K.O.S. treatment, which is drug-free, can become a valuable treatment option.
Chordate Medical estimates that patients should be treated 2-3 times more often with K.O.S. in Saudi Arabia than in Northern Europe due to the low air quality.
By the end of 2022, Chordate Medical entered into an agreement with a new distributor in Saudi Arabia, Janin Medical. The distribution agreement covers both rhinitis and migraine treatment, but so far Janin Medical only has permission to distribute the K.O.S. treatment for rhinitis. They are working to obtain market authorisation for the migraine treatment and Chordate Medical estimates that the registration process will take at least two months.
A first order – more to come
Janin Medical has now received an initial order for equipment and supplies for the rhinitis treatment from the private healthcare company Nahdi Care Clinics. The order is worth around 120 000 SEK and concerns one of Nahdi’s four hospitals in Saudi Arabia’s second largest city, Jeddah.
Chordate expects that two of the other hospitals will place orders on the company’s system shortly. In addition, they expect orders from three publicly owned hospitals in Jeddah, Makkah and Dammam that have been evaluating K.O.S. for a period.
If more orders for the rhinitis treatment continue to roll in, the path to market authorisation for the migraine indication may be both shorter and less complicated, according to Chordate Medical.
A favourable insurance system
The treatments at NadiCare are in most cases reimbursed by the private healthcare insurance company BUPA Arabia, the leading health insurance provider in Saudi Arabia.
In the early 2000s, Saudi Arabia adopted a new law requiring private employers to provide health insurance coverage to non-Saudi employees. This has contributed to changes in how healthcare services are being provided and paid for, with a strong growth in the private healthcare sector’s capacity and the number of health insurance companies.
The reimbursement code for K.O.S in Saudi Arabia covers the cost at private hospitals and clinics belonging to the VIP, Class A, and Class B.
Comment from CEO Anders Weilandt
To increase the outlook for a successful market launch, Chordate has established a representation office in Saudi Arabia. In addition, the company sees the potential to expand to other countries in the Gulf Cooperation Council, GCC, not least the United Arab Emirates and Qatar.
BioStock contacted Chordate Medical’s CEO Anders Weilandt to find out more about the potential for K.O.S. in the GCC area.
In your press release, you mention that patients should be treated more often with K.O.S. in Saudi Arabia because of poor air quality. How often should the treatment be carried out for it to have an effect?
– Most doctors recommend 4-5 treatments per year depending on the symptoms. This is more often than we have seen as normal in, for example, the Nordic countries, but then there is also a completely different air environment in the country.
You also state that a patient in Saudi Arabia generates an average annual revenue from end-user of about SEK 10,000. Could you explain the calculus here?
– The price from distributor to end customer can vary, but it is normally 2000-2500 SEK per treatment. If a patient needs four to five treatments per year, the sum is around 10,000 SEK.
»In the long run, getting insurance reimbursement in place is crucial for a sustainable business in most of the markets we focus on. We are working tactically to get so-called treatment codes in place«
Reimbursement seems to be a winning concept. Do you work with similar reimbursement models in other markets?
– In the long run, getting insurance reimbursement in place is crucial for a sustainable business in most of the markets we focus on. We are working tactically to get so-called treatment codes in place, both on the private and the public side. However, the structures and decision-making paths are radically different in different markets.The content of BioStock’s news and analyses is independent but the work of BioStock is to a certain degree financed by life science companies. The above article concerns a company from which BioStock has received financing.