Posted on October 2, 1996

Business Link Victoria

Sparked by a chance discussion, a Victorian company is now a world leader in diagnostic equipment. The average person sleeps for a total of about 22 years over the course of a lifetime. But one in ten people regularly sleep badly. Establishing why a person is sleeping badly has historically been a difficult and labour- intensive task.

In the mid 1980s, David Burton learned this during a chance discussion with his doctor about a sore throat. As an electrical design engineer, Mr Burton suggested that advances in computing offered great potential to improve the diagnosis and monitoring of sleep disorders. The discussion progressed and, in 1986, he and his doctor developed a computerised sleep laboratory for Melbourne’s Epworth Hospital. Burton then established the company Compumedics and continued to research and develop computer-based devices for the diagnosis and monitoring of sleep disorders. Compumedics diagnostic machines are used in sleep clinics and hospitals in Australia, Europe, Asia and North America.

The original Compumedics company has grown into five companies and diversified into computer-related diagnostic equipment beyond the area of sleep disorders. Today, the Compumedics groups employs 25 people at its headquarters in the inner Melbourne suburb, Abbotsford. Further engineers, scientists and doctors are employed as consultants. Most of Compumedics’ people are involved in research and development, quality control and production. Research and development has been vital to Compumedics’ success.

In recent years, an average 30 percent of the group’s revenue has been reinvested in research and development. Last year, the group’s sales exceeded $4 million. The group’s effective capitalisation is now approaching $100 million and there are plans to float at least part of the group on the Australian Stock Exchange within 5 years.

Compumedics’ sleep diagnostic and monitoring equipment has proven remarkably versatile. Among its range of equipment is a machine which has been used to enable doctors in Australia to consider, in real time, the medical data of patients asleep in China, up to 9000 km away.

The remote use of Compumedics equipment will reach new heights in 1998 when NASA employs the equipment to conduct experiments on sleeping astronauts aboard the Space Shuttle. The device to be used by NASA weighs just 825 grams and is about the size of a video cassette. A battery-powered device is attached to the patient’s body and electrodes monitor such things as the patient’s breathing, heart rate, brain activity, eye movements and leg movements. Each unit is worth approximately $17,000.

The portability of the device isn’t just appealing to NASA. Such portability means patients can conveniently sleep in their own beds rather than attend clinics to have their sleep data recorded. This arrangement will generally be more accurate, more comfortable and cheaper than an overnight stay at a sleep clinic or a hospital.

Compumedics products are used to diagnose a range of sleep disorders. These range from snoring to the potentially life-threatening condition of sleep apnoea. Sleep apnoea sufferers have breathing interruptions in their sleep. Severe sufferers can actually stop breathing several times a minute while asleep. Many sleep apnoea sufferers are aware of symptoms of the condition such as daytime sleepiness and possibly hypertension and cardiovascular problems, yet they don’t realise the cause of those symptoms is a treatable sleep disorder.

Sleep apnoea is suffered by an estimated four percent of Australians. Sixty percent of the machines sold to Australian hospitals and clinics to diagnose and monitor sleep apnoea are made by Compumedics. An estimated 20 million Americans suffer the same condition and, of course, potentially require the same diagnostic equipment.

Compumedics’ international success to date is not limited to NASA. In September 1995, Compumedics was selected to supply diagnostic equipment to the world’s largest sleep study in America. That study will involve 6000 people over a five year period.

In November 1995, it entered a joint venture agreement with Japan’s pharmaceutical and fabric company Teijin for the marketing and Compumedics’ products in Japan. In June 1996, Compumedics signed a $15 million export agreement with American company ReaMed for the sale of Compumedics equipment in the USA and Germany – the two largest markets in the world for sleep-related medical and diagnostic equipment.

According to David Burton, the United States now has 1500 sleep laboratories in clinics and hospitals using sleep diagnostic and monitoring equipment. The American market for such equipment is expected to grow at between eight and 25 percent over coming years. Having dominated the market for sleep monitoring and diagnostic equipment in Australia and having established a sizeable foothold in the American market, the anticipated further growth in the field offers hugh opportunity to Compumedics.

The company was recently selected to supply further equipment for NASA, an Ambulatory Data Acquisition System for use at their space … being used to monitor neurological, cardiomuscular, sleep and gastro parameters. It is scheduled to be sent to the launch site in 1998, for shipment to the space station.