Video Transcription
James Lancaster 00:02
Good morning. It's kind of tough to follow someone with such a cool accent. I'm from Texas, and you're gonna get a little bit different here, so I'm here to talk about technology that keeps you moving. Great team. Everyone here has a great team, or they wouldn't have probably made the cut, but the technology spun out at UT, UT Southwestern Medical School in Dallas, Texas. For the receive and Dave, I met them in the fall of 2018. We formed the company in 2019. We lucked out, getting some great team members in town, in Dallas, with orthopedic device medical experience, Jon-Emile Kenny and then Mary, and have grown the team, a lot of industry experience from there. The problem we're going to talk about is infections on metal implants. Our first indications include knees, hips, shoulders; we will get into spine and other applications. The main problem is biofilm. And you are familiar with biofilm because you brush it off your teeth every day. That's very easy to open your mouth and mechanically remove the biofilm from your teeth, but you're also going to floss, and you're probably going to, you know, get some list strain. The catch is, when you do that on a metal implant, it's a surgical procedure to open the knee site that you could really simply do with your mouth. Okay, so the catch there is a surgical intervention. It's also very difficult to get to all sides of the implant. The first level of care is essentially equivalent to that tooth brushing, but you can't really floss and get the cracks and crevices. It's a half million dollar lifetime cost of care. And the scary part is there's a higher death rate than prostate cancer once you've been indicated with a PJI, a prosthetic joint infection, and there's actually, it's just under breast cancer, so it's a very high death rate. And if you survive, there's a 26% chance, almost as high as an amputation of that limb. The market, the target indication initially is that debridement surgical washout. But we will also be targeting prophylactic treatment, especially for those patients with a very high risk of infection with compromised immune systems. The market's large. There are millions of knees and hips. There will be 1.2 million new knees put in human patients in the US alone, double that worldwide. There are about 650,000 US hips new this year, and there's about 15 million total. So the most common knee infection happens within three to six months of the original implant. But if you have a compromised immune system, you can have an infection years later. And some of you all may have heard, if you have a dental procedure, that infection may travel elsewhere. That's often where it happens. And if you have a compromised immune system due to cancer or diabetes or some other comorbidity, the odds of that infection settling on the implant site is disturbingly high. I mentioned the standard of care. Those debridement procedures, revision procedures, which is where they physically cut out the bone, remove the implant, put in a spacer, and then put in a new implant later. It's very invasive. The catch I mentioned, this is high morbidity for patients with other compromised immune problems. The market, as I mentioned, is large. This is an indication of where we're going. We believe it's a $100 million market with a modest set of the first 50 devices. The average debridement procedure volume for a fellowship-trained orthopedic surgeon in the US, they do about 1/3 of their procedures on implant infections. For these specialists, that's about 400 of the 8,000 US orthopedics. And the average there is about $1.36 million in our reimbursement rate target infection for each of those surgeons. So it scales about $1.1 to $1.3 to $1.5 million per surgeon per year for those indications. The technology here is an alternating magnetic field device. It's non-invasive. And if someone says alternating magnetic field device, that sounds pretty, you know? That sounds familiar? Well, an MRI, a magnetic resonance imaging device, is a magnetic field. We're doing a little bit differently when they tell you to take off jewelry to get in an MRI, or they ask if you have metal in your body. It's because those implants can heat up unpredictably. They're trying to image the body's soft tissue and stuff. We're trying to leverage that heating for therapeutic effect. We do have one PCT patent in the US. Actually, that's two. I need to update that. Just got the new one. Since this slide was submitted, we have three pending after that, and four provisional filings. And the PCTs actually cover seven countries, including the US. One thing we found out early, we had to prove that we did not disrupt the standard of care use of antibiotics. We didn't necessarily think that there would be a synergistic effect, but we realized that the heating effect, once we tested this in vitro, that there's a heating effect combined with the antibiotics, that creates a stair-step kind of improvement rate, a stepwise improvement on the use of antibiotics. That's actually helpful. We had to prove we did not disrupt the use of antibiotics. We didn't expect to show synergy, but that allows us to use more modest thermal doses and have a very great effect. You notice the line down there at the bottom on all studies, both on both on the in vitro and then the sheep studies, the infection rate, even after 21 days, reached down to the point that was, you know, approaching the limits of detection of infection in both animal and in vitro models. Our magic, when it comes down to it, is shaping the field. Actually, it turns out, we made a crazy decision when we decided to start knees first because the knee implants are one of the most convoluted geometry devices you can place in the body. We started at first because it's the biggest market. It forced us to solve how to shape the field for very convoluted geometry, which we did. And we have a very even therapeutic dose on the shape of the implants, not just on the shape of a knee implant, but the shape of multiple implants with one transducer. You see that there's a very even heat distribution on those implants, which is what we're leveraging. We also have the ability to dial that dose up and down. You see, the target dose for an acute infection is right around 70 to 75; that's the reason we determine that, because the bacteria that we've identified on implants die between 45 and 50 degrees Celsius, Mr. Being a little bit more heat resistant, so you need to dial it up to a higher dose within 90 seconds, with a 10-degree temperature increase. You notice that lower temperature on that upper curve is about 65 degrees. With about two minutes dose of that temperature, you have a double two to three log order kill on the surface of the implant. You can dial it down lower. It depends on the bacterial species and also depends upon the level of log order you want to kill. But the dose, shaping the field, and then shaping it for a targeted dose, is the magic of what we do. The clinical and reimbursement model. It's in our outpatient device. You see it placed over the implant site. It is non-contact completely. It's just generated field from outside of it. There are flexible treatment options, as showed on the previous page. You have different dose levels and different shaping effects. We do create a different device for each indication that the device is about 12 inches by 12 by 18. A hip implant, mainly because hips tend to be a little bit larger than knees, is about a 35-centimeter device. Using some different measurements, the economics appear to be settling in the device at least plus $7,500 per treatment model. That's largely because, as an adjunct to a debridement procedure, at about $115,000, it's a most modest addition, but for patients who have recurring or chronic infection problems, the ability to treat them monthly, potentially for the rest of their life, falls below the $30,000 per month typical reimbursement that includes for a US Medicare service. This is the device, the initial device called the Solar 2; it's a solar version, a 2000-watt unit. The knee implant transducer uses about 1400 watts. A hip implant would be about 1800 watts, but we'll dial it down for tibial nails, about 800 watts, so using the appropriate dose that can generate that kill is the target. We did receive early on an FDA breakthrough device designation. We have just been approved, probably about four weeks ago, for our first in-human treatment, and we are physically, we're actively negotiating with a couple of different investigation review boards, and we hope to have our first patient on the table here in the next 30 days, probably in the Dallas area. From a timeline, we are starting the first in-human feasibility trials, then we'll go into pivotal trials. Current discussions with the FDA suggest that we might be able to step directly into the pivotal trials. The first in-human is a safety study starting at 50 degrees Celsius. It's about five degrees above bath water, hot bath water. That indicates about a one log order kill. Then we're going to step up to 60 degrees, then 70 degrees, and start pursuing the pivotal trial. It's likely to be a transition directly in there. The first indications don't show any negative events. The other main work gone up there is ongoing transducer expansion, and that's the knees, hips, so forth. Prior investors include Johnson & Johnson as our lead investor; they've invested $5 million. We currently have a bridge round underway, and we're looking to add five to that. And then we head into the Series B.
James Lancaster 10:03
This is the first in-human patient indication, PJI indication on a knee, a debridement adjunct, that's debridement, antibiotics, and implant retention. That's that surgical brush-out, the tooth brushing kind of equivalent procedure. It's a great place to start because unfortunately, even with that surgical intervention, there's about a 37 plus percent relapse rate. 37 to 44% relapse rate. That basically means they didn't treat the infection effectively, and they got to do it again, and it'll start on a 50-degree dose. It's a modest step-up kind of doing a dose-response study, 50, 60, and then 70 degrees in those first indications. Thank you for listening to the Solenic Medical story. Thank.
