Dive Brief:
- Eargo and Hearx have merged to create the over-the-counter hearing aid company LXE Hearing, the companies said Monday.
- Hearx, the maker of Lexie hearing aids, and Eargo competed for the OTC hearing aid market that the Food and Drug Administration created through the publication of a final rule in 2022.
- Patient Square Capital, which took Eargo private in 2024, has invested $100 million in the combined company. LXE said the investment reflects confidence in the direct-to-patient hearing market.
Dive Insight:
The option to buy hearing aids without a prescription attracted new entrants to the market: Sony launched a device; HP lent its name to a product; Lexie partnered with Bose; and Eargo, which was already selling products direct to consumers, faced increased competition. Apple also entered the market last year.
Contending with the fallout of a Department of Justice investigation, Eargo’s gross systems shipped fell from 45,136 in 2021 to 24,247 in 2022. The company reversed the trend over the first nine months of 2023, shipping 18,613 devices compared to 15,384 over the comparable period of 2022, but still posted a $64.4 million net loss.
Patient Square, Eargo’s majority owner, agreed to take the company private in October 2023. As a private company, Eargo has launched two new OTC hearing aids, Eargo SE, which fits in the canal, and Link by Eargo, which it called the first earbud-style, OTC hearing aid with Bluetooth 5.3.
Lexie launched another product in its line of Bose-powered hearing aids in January 2024. Users can take an in-app hearing test to tailor the devices to their specific requirements. The test uses technology from Lexie’s parent company, Hearx, a provider of digital audiological equipment.
Because Lexie and Eargo are private companies, there is little public information on how well their devices have performed commercially. The merger announcement quotes a report from industry data company Circana that found Lexie was the number one hearing aid brand in the U.S. from August 2023 to July 2024.
Hearx CEO and co-founder Nic Klopper will serve as CEO of the combined company. Eargo's interim CEO Bill Brownie will be COO. Seline Van der Wat and Brian Maguire of Hearx, and Tim Trine of Eargo are also joining LXE’s C-suite.
