Keith Warner, Neuralace Medical - Noninvasive Magnetic Pulse Technology | LSI USA '24

Keith Warner  0:03  
My name is Keith Warner, CEO of Neuralace Medical, thanks to LSI for the invitation and happy to be here. We've all experienced chronic pain. Sometimes it affects us sometimes our loved ones. Axon therapy is a technology developed by Neuralace Medical, and it's a completely novel approach to treatment of chronic pain. You can take drugs, you can get an implant, you can try a 10s unit. This is different than all of those, it's totally non invasive, and the only FDA cleared non invasive treatment for painful diabetic neuropathy as of January 11 2024. So it's an exciting place to be for us. In the market. Today there's over 20 million patients who have chronic neuropathic pain, and only 50,000 or so a year, I have access to one of the best neuro stimulation technologies available, which is an implant. They're very successful, but very much under penetrating the market, leaving millions of patients seeking a solution who want the benefits of neural stimulation, but in many cases, not the implant, not the cost. If you look at our solution, our device is in the center of this slide. The reason there's an MRI device next to it is to be illustrative to the point that we deploy a very high intensity magnetic field about 1.6 Tesla, specifically onto a nerve, our ability to do that to deal with chronic neuropathic pain, clinically has proven very effective in multiple studies. They continue to be to be discussed at large conferences, they're continued to be published. And it's a device that's useful in a physician's office. And by a mid level practitioner. In terms of the market. Our device was first FDA cleared in the middle of 2021. It got its as I mentioned, its most recent clearance for painful diabetic neuropathy in January 11 of this year. So we're super excited about accessing this this significant market. Why does it work better than electrical stem? Why is it a different approach than an implant that uses deployment of electrical stimulation. Magnetic Stimulation is able to comprehensively address the A Beta fibers selectively and comprehensively, while also stimulating the CNS. The mechanics of why our device works are fascinating. And they're well supported by our clinical data, such as this. So this is an example of our filing with the FDA which resulted in our FDA clearance for painful diabetic neuropathy, over 80% of patients respond to this therapy, and do so in a highly durable way. As an aside, we're just about to present our 12 month long term results from a larger study that has diabetic patients as well. But we'll be presenting that at the Aspen meeting in July. In terms of competition, as I mentioned earlier, we you have the options of drugs, you can you can look at an implant, you can look at some kind of a wearable typically wearables are far lower in intensity than our device. That's one of the more predominant aspects. We have patent protection around our waveforms, our frequencies, and our ability to project this high intensity magnetic field, specifically onto a nerve. How do we make money. So we're currently selling in the government market in the United States to the VA and DoD as we provide this capital at no charge, and they pay us by the treatment. So so in this particular case, and across the VAs, they pay us $350 For each and every 13 and a half minutes treatment. That's how long a treatment takes with this device. If you look at our go forward commercial strategy, we're currently in the government market and awaiting CMS, new tech APC path reimbursement approval. So we've been in calm in conversations with CMS since last August, we've taken questions from them. And we're anticipating in 2024, to have a reimbursement code from CMS under their new tech APC pathway. Following that we intend to do a larger study and access the larger market in terms of the private payers. But the next step for us is really CMS and Medicare reimbursement. This is a very large market over $500 million. We're about to access where we are currently, as I mentioned in the government market, but in in the world of ASCs, roughly, there's 6000 of them, roughly, you know, and 4000 of the 6000 are multi specialty ASCs. And there's a couple of 1000s that are more focused, we see opportunities in pain in both groups. And as I mentioned, it's a significant opportunity. So why is this potentially interesting from an m&a point of view, let's say so, so in terms of revenues, as you may know, the implant players, they generate one time revenues, there is really no recurring revenue. So we bring that to the table. So each and every treatment generates $350 And, and it's useful for patients at the top of the clinical algorithm, not necessarily at the bottom where implants tend to exist. Patients would be trying this therapy alongside drug therapy. Generally, there are also no side effects to this therapy and no risk, something that patients very much like and and the doctors. And obviously there's a cost difference knowing that an implant can cost 40 to $50,000. And this is $350 per treatment. And if you follow the regimen that we recommend, it's about $6,000 per year. In terms of our team. I'm an established entrepreneur, I just had an exit at attune medical, which was sold to human addicts and announced a couple of weeks ago for $160 million. I was the CEO there for almost five years. And so I know what the journey looks like. And I've aligned myself with others, Joe mill kibitz, is an established executive from Hewlett Packard and true med. And we've also aligned ourselves with a clinical leader in the in the acute pain in the pain space, Dr. Marshall better, and he is our chief medical officer. So the nucleus of our team is very strong and experienced. We have operating company building and clinical all combined together and in our advisory board are leaders in, in the in in clinical leaders in the United States. And even even outside of that. In terms of where this goes from a revenue point of view, the growth here is really going to be triggered and for an investor I think the bet is cms allows growth to explode for this company. If we get CMS reimbursement as we plan for this year, as we expect, we think revenues will follow shortly thereafter significantly. Just so just to summarize, you know, this is a high margin play, the margins are very high, we basically don't have a traditional consumable, we we we place the device, we're paid per use. And what we sell really are access cards for this device, which is what really is purchased by by our government customers today. And there's patients being treated every day in government clinics around the United States using axon therapy. We signed our first contract the beginning of last year with our first VA health system. And as I mentioned, we had clearance for PDN January 11. We expect CMS here this this before the end of this year. And we've got a very experienced team and patent protection. We're currently selling a $2 million convertible note. Some of the features are there's a 12% interest, there's three times liquid, there's three a 3x of the note amount on change of control, we have a discount going into the going into the next equity round of 40%. And, and basically these funds are designed to prepare us to launch into CMS and to continue our commercial approach within the government sector. We look at we've talked to all the strategics they know who we are, they know how complimentary the non invasive and the implant can be together. And and I think we have the right dialogue such that when we do get CMS reimbursement we'll have a chance to look at partnering with some of them or potentially even further toward an m&a aspect. That's it. Thank you very much. I do appreciate your time.