Stuart Mitchell, Novuson Surgical - Direct Therapeutic Ultrasound (DTU) Technology | LSI Europe '24

Stuart Mitchell 00:02
I'm Stuart Mitchell, the founder and CEO of Novuson Surgical, where we are clearing the way for safer surgeries by eliminating excessive burning or tissue damage and literally clearing the smoke, making surgeries faster and more precise without risking the health and safety of the patients or the healthcare workers. Have you ever wondered what happens during a surgical procedure? Did you know that, depending on the procedure, the surgical suite can be filled with smoke? Before I get into that, let me tell you a little bit about our highlights and milestones. Since the company started, we have five working prototypes, all based on NIH grants, used in over 1,000 studies, many of those performed by surgeons. We're ready for our regulatory filing pending our regular validation and verification studies. We have 18 patents now; I didn't update my slide. Shame on me. We have pre-commercialization revenue for integrating our technology into a surgical robotic solution, bringing in over ten million into the company, a third of that was through non-diluted funding. We have strategic partners, including an Italian distributor that's ready to roll once we hit the European market. In 2022, we were named one of the five best medical device companies to watch. In 2023, we were named one of the most fundable companies by Pepperdine University.

So before I get into Novuson Surgical's technology, this is electro-surgical device technology that's used in a lot of surgeries. Surgeons use these devices, or any type of electro-surgical device, because they make surgeries faster and more efficient. The problem is when they use these devices, especially in laparoscopic procedures, up here in the upper left-hand corner, this is what the surgeons see: the surgical field is filled with smoke.

So we're going to put this in a little bit of perspective for the US market. Over a third of all surgeries have complications. Half of those are considered avoidable. Three-quarters are due to technical errors. Every 90 minutes in the United States, a patient is accidentally burned by an electro-surgical device, resulting in two deaths every day and costing the US hospital system $215 billion every year. But there's a lot more. The smoke is actually toxic; it's a carcinogen. It's equivalent to smoking 30 unfiltered cigarettes during a surgical procedure for the surgical team. The current technologies develop smoke because they burn and char the tissue, and you can imagine the impact that this would have on a surgeon over their career, 20 to 30 years, not to mention the patients who are also dealing with the excess damage to their tissue.

We realize that at Novuson Surgical, there is something that we could do to impact all surgeries, making them safer, faster, and more precise. So how bad is the problem? In the US, over half the states have passed laws mandating the mitigation of surgical smoke. It's so bad that many states are actually starting to bring this legislation in. The current technologies on the market, of course, have solutions; it's called the smoke evacuation system. They just suck the smoke out, but their only real solution is Novuson Surgical's solution, which is to just not generate the smoke in the first place.

This is our technology being used in an animal model. There it goes. Let me try that again. There we go. That's our technology being used in an animal model. Once it's activated, you can see we can completely weld the tissue together. We cut the tissue all with ultrasound. What makes our technology different from any other technology? We use ultrasound energy to weld the tissue together from the inside out, and we use ultrasound energy to cut the tissue. Our competitive advantage is clear. We operate at about one-quarter of the temperature of the other devices on the market. This is why we don't burn and char tissue, while they do burn and char tissue, leading to excessive tissue damage.

Well, it's an $8.9 billion global total addressable market. It basically has four verticals: minimally invasive, general, robotic, and endoscopic surgery. Our technology can be integrated into any of these devices. We're currently focusing on the US market, which is a $2.6 billion segment for Novuson Surgical to go to market. What we're going to do is align our key opinion leaders and sales staff in states that have already mandated the mitigation of surgical smoke. We're developing collaborations with the Association of Perioperative Nurses; this is the organization that's behind the legislation, pushing the legislation to get passed. We're aligning ourselves with them because they can make introductions into other surgical suites for us. They have a complete network of surgeons that they work with, and there are 41,000 registered nurses in the United States that will help push our technology out.

We're initially going to look for early adopters of the technology in the surgical suites where our key opinion leaders are, and other surgical centers that are interested in adopting technology early. We're doing strategic collaborations with the professional associations. We're going to go out with direct sales, which will involve bringing in a VP of sales, a director of marketing and social media, and presenting at medical device conferences.

So these two positions that I just listed here are positions that we have open at Novuson Surgical, and we're currently looking for people. We will have two revenue sources with Novuson Surgical. Our first revenue has been through our strategic collaboration in surgical robotics. We have one that we are about three-quarters of the way through, and we have two others in the works. This actually starts out as revenue for the company because it's an R&D collaboration, and as they like the technology here, we get it developed. It becomes a licensing and royalty agreement.

As I just indicated, our laparoscopic devices will be through direct sales into the ambulatory surgical centers or independently owned surgical centers. Using this model, we will achieve about $33 million in revenue by 2028, getting our units, our generators, into 325 surgical suites and selling around 60,000 handsets in 2028. That's a disposable component; it's a razor, razor blade sales model.

This is a basic sales cycle into ambulatory surgical centers. The salespeople go out in the first month, they place a unit, and they let the surgeons try it out. They have to follow up every couple of months, and then it becomes a distribution network that takes over from there. We'll be exiting in two to four years through strategic collaboration. We've had meetings with Ethicon, Medtronic, Coy, and Medbot to invest in Novuson Surgical. The most recent acquisition in this space was Full Logic, which bought an electro-surgical device company for $460 million.

I have a PhD in bioengineering. I have worked with surgeons, corporations, and government agencies, developing better technologies for surgical devices. Our management team has experience in business finance, product commercialization, and medical clinical trials. Jean and I started our first business with a $100,000 investment. After 10 years, we grew it to where it was generating a million dollars a month in revenue, and then we exited through strategic collaboration. Our directors have experience in business finance, and our medical advisors are surgeons who indeed need a smaller, safer device.

We have a $3 million preferred equity offering open, and that is to bring our first-in-class three-millimeter device to market. That's for doing regulatory filing, initial user evaluations, and going into the clinics initially. This is a little bit more about the use of funds where we are right now. We have our contract manufacturer building our devices for us, finalizing some software. We're in meetings with the FDA right now, and then we'll start some in-house validation studies.

Achievements so far this year include three additional robotics collaborations that are in the works. We have about half a million dollars in from our current investors, and $145,000 on the Series B that we have open. We're doing our strategic collaboration with the Road to Serve Nurses Association, and we are in diligence with two major investment groups.

So thank you. Please help me in making surgery safer and more precise.