1:00 Why did Gilad come back to Israel from a long relocation and a career overseas? 

5:10 Why did Gilad suffer from a culture shock when returning to Israel?

8:04  What does Itamar Medical do and what drives the company.

10:21 How sleep and cardiology and inter-related. Why is sleep this important and to whom?

12:59 Where does Itamar Medical play in the new world of sleep and prevention of disease

15:14 How is sleep related to wellness and how is Itamar is becoming a key player in this market. 

15:35 Would Itamar Medical consider selling its product directly to the end consumer as a complete package?

20:23  What Gilad thinks about an Israeli company public versus a US-based or European-based company being public? Is there a difference in the way that the local and international market sees an Israeli public company? 

25:24  What tips can Gilad offer to CEOs of publicly traded companies in Israel? 

27:16  Why did Itamar Medical acquire Spry?

30:20  What tips can Gilad offer for smaller companies looking to be acquired?

31:51  Examples of mistaken acquisitions in the ECG device market

33:42  How did the COVID pandemic affected Gilad, personally, and within the company.

Gilad. You had an amazing career overseas, almost 20 years. I saw that you came back like 7 or 8 years ago to manage Itamar Medical. Why did you come back after such a long and prosperous career overseas?

Gilad Glick: What a deep and broad question. But yes, you're right. I left Israel back in '97, after I finished my (service in the) army, I was a communication officer in Shiryon in the tank division. And registered to studies in the Technical University of Eindhoven in Holland. It's a very, very good technical university, it's equivalent to the Technion. And I looked for a part time job. I saw a small Israeli startup company called Biosense that looked for service engineers to install and fix their system in Europe, and I took the part time job. And 18 months later, the company was sold for half a billion dollars to J&J (Johnson & Johnson). And we started growing really fast.

I had all my studies on the job later on, all the original plan was gone. But yes, I did spend 20 years with Biosense Webster as part of J&J. 10 years in Europe and 10 years in the US. And to your point, my last role for the audience to have a perspective, I ran worldwide sales and marketing for Biosense. When I left, it was $1.8 billion, or $1.9 billion in sales annually. Today it's $3 billion in sales. So, it's one of the largest operating company of J&J. Very proud of them and I call it home for a lot of good reasons.

And at one point in time, you know, I have also 3 kids, all born and raised abroad. The oldest was born in Paris, France and the other two were born in California. And when the oldest became 10 years old, you have to ask yourself, 'What do we do next?'. Because, you know, it's kind of a point of no return from a cultural identity and other things. And of course, you know, abroad, at least from a career perspective, the options are better and the economics is better. But I looked around and I saw the kids of Ex-Israelis, who are growing abroad have an identity crisis later in their life. They don't know who they are. They're not really Americans. They're not really Israelis. They're Jewish, but they don't understand what it is because we're not Orthodox Jews.

So, it's not as strong of a connection. And I decided, at the minimum, I have to give them an identity. So, we packed and moved to Israel.

Was moving back to Israel a dilemma? And what did you find when you came back?

Gilad Glick: It's a dilemma. I'm very happy I made the decision. People start talking about pre-World War II, Germany and anti-Semitism. I'm very happy I made the move. And I took the job at Itamar, already, from there. And so, I didn't have even one day of overlap.

And your second question is, what did I find? This is a great question.

First, although I'm Israeli, who was born and raised in Israel until the age of 21, I had a culture shock when I came back. On the work perspective, deep, deep and fundamental culture shock. You have to get used to the Israeli culture again. There is a lot of benefits to the Israeli culture, but there are some things that are challenging.

And in fact, to describe something, the biggest challenge was my first leadership meeting with my team. I went in, we printed an agenda. Very thoughtful about exactly what we need to discuss, what the required outcome, what the objective was, who are the speakers, and that thing's, pretty much, on paper. And the rest was one big chaos of everybody screaming at each other for 3 hours. And they thought it was a really good meeting, in the end. And it took a long time to, I think that for me, get used to the benefit of open, free and unrestricted discussion, which has a lot of benefits. But implement some structure. So, we can all talk, not at the same crime. And listen to each other, actually, not just by appearance. And somebody takes notes, and somebody follow up on the notes after, so that took time. But once it's done, the hybrid model of both was very, very useful for me. I think it's a great model.

That's an interesting perspective, I think, because, you know, we went from hierarchy. And I think, kind of historically, organizations were very hierarchical, had a strong hierarchy in them. And you know, there's a manager somewhere in there. And I think I had a similar culture shock when I came back from the US. And I went into a situation where I was looking for the person in charge, and I said, you know, 'Who's the boss here?', and 5 people said, 'I'm the boss'. So, it was quite funny. But I think to your point, there's definitely a shift and this idea in an organizational culture, that you have to have an open door. And try to learn from every generation and every person within the organization. So, that combination of structure and everybody feeling like they should be able to say what they want, and what they feel, probably is a challenge. But also has a lot of rewards in it. So, that sounds like a very interesting . I would have liked to be a fly on the wall in that situation.

What is Peripheral Arterial Tone (PAT) signal? Can you tell us a little more about what Itamar Medical does?

Gilad Glick: Itamar Medical, again, is dual listed public company, NASDAQ and Tel Aviv. But, originally, it was a company created by an inventor by Dr. Peretz Lavie, the president of the Technion for 8 years. He's recently retired but he is the sleep psychologist by training. And he found that in order to understand sleep and sleep diseases, in particular sleep apnea. You don't need to have that very complex, which is a standard of care, in-lab polysomnography or overnight test. When you hook a lot of EEGs and nasal cannulas and tubes and bands.

But you can see it from the finger due to a signal called Peripheral Arterial Tone or PAT. And he and others Dr. (Jacob) Sheffy and Dr. Giora Yaron and Martin Gerstel. All our famous names in our industries have founded Itamar and invented technology to capture the signal and apply an algorithm to interpret it for sleep testing.

So, that's what they did, and they did an amazing job. Technology wise, brilliant. Really fascinating. Actually, plans have not changed since they founded it, until this day. When we added a lot of stuff, but the fundamentals remained the same. And Itamar started to sell but, very quickly, we realize that it's difficult to sell a medical device. Especially, if the doctors we sell to don't like you. And a majority of the sleep doctors made a lot of money from those complicated in-lab test. And they were worried that the in-home very easy-to-use watch-like device that Itamar made is rendering them unnecessary and threatening their income. So, they fought Itamar and that took years to realize.

And the first thing I did when I joined, I changed the "call point" from sleep doctors to cardiologist. And that changed the company's DNA, changed the company's future, you know, fortune, if you will. And I think made a big difference.

How are sleep and cardiology connected, why is sleep this important and to whom?

Gilad Glick: Yeah, Great. To answer it, I'll have to speak 30 seconds of what sleep apnea. Sleep apnea is a disease that is very prevalent. 1 in 4 adults in the Western world suffer from moderate or severe sleep apnea. We know it by people that snore. Snoring is a symptom of sleep apnea in most cases. So, you have a lot of people that complain or their significant other complain, they're snoring.

But the underlying mechanism is the inability to breathe properly during the night. And that inability to breathe properly during the night, causing a lot of things; like intrathoracic pressure that stretches your heart, large fluctuation in oxygen level, up and down, up and down many, many times.

And just to put things in perspective. Because nobody choked to death from sleep apnea, because the brain is so smart, it's waking us up. You end up with a moderate to severe sleep apnea, waking up 30 to 60 times an hour, all night every night. You're not even aware of it, you're exhausted.

It's like a Shabak interrogation practice, right. I mean, it's really bad. And at the end of the day, the outcome is scarring on the cardiac tissue that causes arrhythmia heart failure, and many other bad diseases, including stroke. But the connection was only recently found. So, sleep apnea was used to be thought about as a lifestyle disease.

Snoring, tiredness, going to sleep on the couch, whatever. And that did not attract a lot of attention because it's a lifestyle disease. But once science described the connection to cardiology, made sleep apnea a cardiovascular risk factor, and we start calling on cardiologists, of course, it's become the equivalent of hypertension. And once your hypertensive it's a different deal. It's a medical condition.

The branding of sleep has changed. So, sleep apnea is a medical condition but there's so much around sleep and the connection to lifestyle and also other diseases. Where do you see yourselves in that new story? And are you even interested in going into that space of what's considered now to be wellness more than medical?

Gilad Glick: I think this is a really fascinating question. I'll describe it in a broader stroke because I think it's applied to a lot of things. Yes, sleep has rebranded itself as a important quality of life in health and wellness item like eating well, right; exercise, sleep well. It's a new paradigm of healthy people. And some add relaxation but good luck with that.

So, those are the you know, 3 to 4 elements that we are all experiencing. And from a total care solution, of course, as a provider of sleep solutions, sleep is important. And by the way, sleep apnea is not the only sleep disorder, there is another large sleep disorder called insomnia. And that's when people are chronically defined as more than three days of inability to sleep properly in a row on a continuous basis.

A lot of people suffering from insomnia. We believe again, 1 in 3 adults suffer from chronic insomniac disease. They're continuously exhausted. But unlike sleep apnea, they're aware they couldn't sleep. So, it's frustrating. You know, it's really something that people are not happy with. And the problem with insomnia, like sleep apnea, the solution is either sleeping pills, and they're either addictive or not working overtime and people don't like to take pills every day for the rest of their life.

Or you need a psychologist to help you and that's called CBTI, (Cognitive Behavioral Therapy for Insomnia). It's very effective but it's expensive. You need to seek psychologists for, you know, 7 to 14 times and you know, in Israel, it's 300 to 400 shekels a time. And it's an investment. It's not covered by insurance.

So the short answer is, wellness and sleep is important. And it's not only wellness, it's actually sometimes a disease, and Itamar would like to provide a solution. The problem is health economic factor. Because there is no device to sell and there is no procedure to make, so there is no money behind it.

Are you planning to enter the direct to customer space? At the moment, you're selling it directly through a prescription-based position. Are you thinking about approaching and selling it directly to the end consumer as a complete package?

Gilad Glick: The answer is yes. And actually, we've tried it once and failed. I'll describe that in a second. And now we tried other ways. And I also would say that I differentiating (DTC) Direct to Consumer versus (DTP) Direct to Patients. Those are easily confused, but not the same answers. And I'd like to differentiate for the audience between the two.

So what we've done initially, about two years ago, we partnered with a company called SoClean. And SoClean is a private US company, and they made devices to clean your CPAP, disinfect your CPAP during the night. Okay, there is no reimbursement for it. So it's all DTC. And somehow, they embarked on that very successful strategy of using TV ads, late at night, mostly on the shopping channels.

When people snore and can't sleep or their partner snores, so they can't sleep. They sit in front of a TV mostly in the US. And they see these advertisements, that if your partner uses CPAP and then all kinds of green germs comes out, very scary. 'And for $3.99, you can buy right now, operators standing by!' and created a $200 million dollars a year company. So, amazing.

So, we partnered with them because they demonstrated they can sell to sleep apnea patients something, $200 million a year. That's Itamar's own $40 million last year and potentially $50 million this year. So, four times bigger. And I said that must work. Colossal failure. Colossal failure, it didn't work. And the answer was, that if you have an insurance alternative to something, it's not as easy to sell it DTC as something that doesn't have an insurance alternative.

Because the patient gets interested, they go to Google, they check and if they see it covered by insurance, they will go to the doctor to get a prescription covered by insurance company. So, we failed. What we're trying now and it's working better is digital DTC, not TV ad-based DTC. Targeted the right socio-economic level people that have extra money to spend, they want the velvet service and that's working better now.

And in particular, we're working with a company called Lofta, which I made public. They're San Diego based and they're doing a good job. If somebody wants to see an example, that's a good example. That's DTC. But what I see emerging better is DTP. Companies like Livongo, companies like Dexcom.

And what they do, they get from an employer or from an insurance carrier, a target list of patients that, potentially, can qualify; and they get a ticket to license to convince and to embark on a program that is pre-funded by the plan or by the insurance.

And look what happened with Livongo for diabetes, I mean, amazing success. Something to be really envied and learn from. And that I think is a better option in the US healthcare system, DTP, than just traditional DTC. I know it was a long answer, but it's a lot of important information.

Itamar Medical is public. I'm curious to hear you know, what you think about an Israeli company public versus a US-based or European-based company being public, and whether you think there's a difference in the way that the local and international market sees an Israeli public company?

Gilad Glick: That's a very, very philosophical question. But first, facts. Itamar Medical became public in 2007, before my time, because it was almost the, only, last resort for it to raise capital. And back then, it's changed now. But back then, the company went public, when they couldn't get private money. It was, you know, less questions asked and less, you know, people sitting on your board.

And the chairman back then, you know, still the chairman Dr. Giora Yaron, which I can confidently state on his behalf. He said, that's probably one of the biggest mistakes he ever made. Because once you have a company going public, and especially on the Tel Aviv Stock Exchange, and specially until two years ago, it was a liability and not a benefit.

Lots of overhead, very strict rules from a reporting perspective, from the Israeli Security and Exchange Commission, way stricter than in the US. And a very skeptical capital market that doesn't have analysts that specialize in healthcare, let alone in medical device. So, you get compared to oil and gas, you know, exploration company in the same breath.

And that's the historical perspective. I must admit, though, that when I joined and I needed money for Itamar, the Tel Aviv Stock Exchange was very useful and fundamental in us raising early money. And I'll tell you the difference. And I'll tell you what happened when we went to NASDAQ and why we went to NASDAQ was different.

In Israel, I think, on one hand, everybody is skeptical, and they don't want to give you a big multiplier, that's on one hand. On the other hand, companies that are not as stable in predicting their future, have more chance to get to raise money. In Israel, you can tell a good story. Again, encouraging facts and have a vision to meet and everything else.

But if you miss every third quarter, or you don't have even to give a guidance, to be, you know, to be covered and stuff like this. You still can raise money and you still can create. In the US, if you miss a quarter, you're dead. And if you miss two quarters, you're dead in the water, pretty much. So, the big difference is maturity.

I think it's good to be listed in Tel Aviv Stock Exchange when you're earlier in your development stage when your milestones and particularly revenues are not as stable; but you don't get nice valuations. But you can raise money and you go to NASDAQ when you can predict and be systematic about your milestones and revenue, and can give guidance and can be specific and meet it every single time, then you get more money and better valuations. So, I think that's the secret sauce here between Tel Aviv and NASDAQ.

Yeah, so it's a different perspective based on where you're traded. And, you know, in terms of the culture within the organization. You're traded on both. So, you have to, you know, you have to submit to both requirements. But if you choose to be traded in Israel or choose to be traded internationally, your company is going to react differently, you know, internally. To have maybe more structure if you have to, or you know, try to hit your targets better.

And to answer your earlier question. I think that at the end of the day, you asked an important question, are they treating Israeli or foreign companies differently? The answer is absolutely yes. You don't get the same exposure. A lot of funds, big funds, are having limitations to invest in foreign based companies.

So, you don't get the entire spectrum of potential investors to participate in your offerings in your trading. But you can convince your US oriented (base) by adding directors that are Americans or foreign in nature. You need to have partners that believe in you. You need to have most of your revenue in the US, that's super critical.

A dollar from the US is not equal to a dollar outside the US, for US investors. In a big way. So, those are the kinds, some of the tips and tricks. There are tons more, but I think it's becoming too technical.

And there are many people that will be listening to this podcast where smaller, younger companies who want to be acquired. Why did you buy Spry? What are you looking to gain out of it? And what tips would you give to companies that want to be acquired by a larger company such as Itamar, or any other company in their space?

Gilad Glick: So, your first question was, why we acquired Spry? And it was a strategic move. And the strategic move was to change the future of the company from a testing company to a monitoring company. Right, because they look around and again, I use the example that are public and not Itamar.

And you see what happened in the glucose correcting to monitoring space, when 10 years ago, all you had was to prick your finger and test the one particular time during the day. And it could be good timing or bad timing into the Dexcom and Abbott's of the world that blooms (makes) now, billions of dollars in monitoring business. And that's the future.

In that space, I came from prior to Itamar from Biosense when we were dealing with arrhythmias, you know. 10-15 years ago, you had to go to the doctor to perform an ECG or an EKG as we call it sometimes outside the US. Here, the market shifted to continuous home-based monitoring. And the latest and greatest is, implantable loop recorders that keep monitoring you for three years.

And it looked like this and it doesn't have any relief. And it's just something that sit under your skin and continuously monitor your arrhythmia, so. I see where the world is heading. And the world is heading to monitor patients and have wearables that are medical grade that reports, continuously, the conditions. And we want to do the same for sleep apnea from a vision perspective.

And especially in chronic disease, it's an accumulative damage measurement. Right. I mean, it's tells you that every time you were not managed for your glucose or for your arrhythmia for your sleep, you just accumulated more damage to the tissue. And that puts you in a different risk factor. So, you can manage it and that's, I think, where the future is.

So, that's why we acquired Spry. Spry has a technology that is a wristband, that does measure the similar signal that Itamar is expert at, from the finger but from the wrist. And it's very difficult to ask a patient to wear something on the finger for a month. They're not going to do it. Fingers have a lot of uses, I will not go into the details right now. And wearing it on the wrist is something that a patient can tolerate for a long time. So, by acquiring Spry, and by the way for the record it's the San Francisco based company. The largest investor was Dov Moran with his fund. And the founder is an Israeli called Elad Ferber, that was in Talpiot before and Israeli space program. So, there was a lot of Israeli comfort, if you will. And that made things easy. And we just probably bought two to three years’ time to market by acquiring them.

What tips would I give to smaller companies looking to be acquired?

Gilad Glick: A lot of things. The answer is, it really depends. But the most important thing, is to, I would say, to really thoughtfully analyze, who is your target? Who do you want to sell to? By the way, on the record, I am encouraging companies to grow and to develop business and not to sell quickly.

Because I think it's creating more jobs for Israel, it's creating more maturity, better valuation. And the stock market, as long as the current craziness continues, deliver better valuations to the employees and liquidity valuation. You can actually cash out without selling or your stake of being home. I think that's a great alternative.

But if you already decided you want to be, you know, acquired, which is something I'll challenge. The most important thing is to analyze who you want to be sold to; realize what their strategic needs are, create the relationship to get it done, understand their unmet needs.

And always remember, large corporations prefer to pay more for more mature technology than to pay less for less mature technology, always. So, you have to think about what are the milestones you want to meet quickly? In order to meet that kind of a requirement.

Is it best to try and grow organically as much as you can before selling out?

Gilad Glick: Yes. And that's something they like, I mean, the cost of that. They want to buy us because it's earlier incurred per is not true for large, multinational corporations. They want to mitigate the risk on your dime and their reputation. And buy you for more money, when they de-risk most of the technology, they de-risk most of the ... I want to give you an example.

You know what? This is great. In the last months, there was a complete craziness in the world of home ECG holders, right. So, two months ago, Philips started by acquiring the largest player called BioTelemetry for $2.8 billion. Followed quickly by Boston Scientific buying another company for $1 billion dollars from the royalty monitoring. And then Hillrom because they felt left out, they bought BardyDx for $400 million. A week after all that was announced, reimbursement went down to 70%. Hillrom canceled the deal. iRhythm dropped from $6 billion to $4 billion in valuation. Phillips, I think, are still walking in circles asking themselves what they've done.

And there is no comment form Boston. But we see a typical example of what just happened. You can trace all this back. What happens if you don't understand the maturity of the market? You make a big acquisition and then the value evaporates, overnight. And I tell you, all those BD guys in those corporations are rewriting their CVs as we speak. It must be the case. Yeah.

What was the effect of the COVID pandemic on Itamar Medical? Can you share a little bit how it's affected you, personally, and kind of how you've been working within the company, as a consequence of COVID?

Gilad Glick: Yeah, it did fundamentally. So, prior to COVID, I spent since June of 2013 until March of 2020 every other week in the US. One week in the US, one week in Israel and every other time even in Europe and Asia. So, I was 60% to 70% of my time, not at home. And it wase very, very important to connect with customers, connect with partners, do the R&D road shows and the deal road shows on Wall Street and all the other cities. It was a requirement to per CEO.

I mean, if you don't want to live in the US, you live on a plane. That's pretty much was the paradigm prior to COVID. And then COVID hit and I couldn't fly anywhere. And in the beginning, it was freaky because I didn't know how we're going to do all those things without running up or down in Wall Street buildings; and running in and out of hospitals and you know, connecting with partners and having those dinners that the informality takes place. But somehow it all worked out. Bankers suddenly, are you know, instead of wasting most of your time, shuffling in, you know, trying to get a cab or an Uber or a limo and driving up and down, elevators and spending all of your time; You just do back to back 20 meetings a day, with funds. I raised money, I raised $80 million, you know, full on without leaving my career office, or my head, silly actually home office to be really honest. And it worked. So there was a paradigm shift that, suddenly, you keep connecting, you keep accomplishing, you can communicate effectively. I think, I still miss the face to face. But once that paradigm is accepted on both sides, you can get things done. And then I've 3 kids, I said, that's why I move back to Israel. And now I'm a year in their life. And it's priceless. And if you ask me if I'll ever go back through every other week for 6 years, the answer is probably no.

Itamar Medical's Website

Gilad Glick's Profile on LinkedIn

Spry Health's Website