July 2, 2024 • 43 mins
Onward Medical is driving the path to help paraplegics with spinal cord injuries (SCI) regain their lives, including one patient who is now able to play his guitar again, CEO Dave Marver tells Bloomberg Intelligence. In this episode of the Vanguards of Health Care podcast, Marver sits down with BI analyst Matt Henriksson for an in-depth interview about the company, key takeaways from the recent publication of the Uplift trial by Nature and how Onward’s developments differ from others that use brain-computer interfaces (BCI). The medical-technology provider connects BCI to its ARC platform to restore movement of the human body, instead of simply using the patient’s thoughts to control computer functions.
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Episode Transcript
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Speaker 1 (00:21):
Welcome to another exciting episode of the Vanguards of Healthcare
podcast series. My name is Matt Henrickson, the medical technology
analyst at Bloomberg Intelligence, which is the in house equity
research platform of Bloomberg LP. Where pleased to have back
with us today, Dave Marver, CEO of Onward Medical, a
medical device company that is driving the innovation to enable
(00:41):
people with spinal cord injury to move again aided by
their ARC therapy. You can dive deeper into the company
and its financials by typing in O NWD space BB
Equity go on your Bloomberg terminal. Dave, welcome back and
thank you again for joining us.
Speaker 2 (00:58):
Thank you, Matt, it's nice to be here with you.
Speaker 1 (01:01):
And when we were talking, we were touching base back
in late last year. You know, you kind of gave
a great overview of the ARC system, what it's able
to do. But maybe why don't we refresh the listeners
with kind of a quick overview of the technology and
what you're designing it to treat.
Speaker 2 (01:20):
Oh with pleasure.
Speaker 3 (01:21):
So we have three purpose design technology platforms and each
of them stimulates the spinal cord to restore movement or
some other critical function after paralysis after spinal cord injury
and also potentially after Parkinson's disease.
Speaker 1 (01:38):
Okay, great and so And recently though, you've had some
news that came out or a publication about one of
your initial systems, the rc EX. This was for the
UPLIFT study. So maybe why don't we go through and
talk about what the trial was designed for and you know,
what are some of the highlights from of those results.
Speaker 2 (02:01):
Yeah.
Speaker 3 (02:02):
Indeed, so Uplift was the name of our pivotal trial
or Class three trial for those of you from Biotech,
and we conducted it at fourteen leading rehabilitation clinics around
the world.
Speaker 2 (02:14):
The idea was.
Speaker 3 (02:15):
To determine the safety and effectiveness of our rc EX system,
our external neuromodulation system, to determine whether it could improve
the strength and function of the upper extremities in chronic
incomplete spinal cord injury. And we were very pleased just
a couple of weeks ago two that the Nature Medicine
(02:39):
publication on the UPLIFT trial was published and the results
were striking. For example, ninety percent of people improved strength
or function up to thirty four years after respondal cord injury,
eighty seven percent of participants reported improvement in quality of life.
The participants also reported reductions in spasticity, improvements in sleep,
(03:05):
and improvement in sensation touch. So, really, it exceeded all
of our wildest expectations and hopes, and we're really keen
to commercialize this and get it out there, into the
clinic and into the home where it can help people.
Speaker 1 (03:21):
Yeah. No, that ninety percent figure really caught my attention
as well. When you talk about strength or you talk
about you know, the functionality, what does that mean for
someone who has spinal cord injury. I mean, where are
they coming from and what improvements does that entail for
both strength and functionality.
Speaker 3 (03:42):
Well, just to set some context here for those listening. Currently,
if you have a spinal cord injury, you have emergency
surgery and you undergo rehabilitation typically for about three months,
and then you're sent home because there's nothing else that
can be done for you. Those injured usually have that
brief window after the injury to recover function and thereafter
(04:04):
there's been nothing historically that can help them until now.
And that's why it's so important that we have been
able to demonstrate that this archaex therapy can indeed restore
strength and function. The reason we started with upper extremity,
that that's the first indication or recovery target for us,
(04:25):
is because even a small improvement in the function of
one's hands can have a dramatic improvement on one's quality
of life. For example, in the trial, we demonstrate that
the device could improve grasp strength to the extent that
a person could lift a filled glass, or pinch strength
(04:47):
to the extent that they could pick up a fork
with food on it and feed themselves. So it's really
a matter of translating these improvements in strength and function
that we're observed into impact on activities of daily life.
That's the idea to introduce improvements that can result in
greater independence, greater greater privacy for example. That was the goal,
(05:12):
and we're very pleased that the study was a success.
Speaker 1 (05:16):
Yeah, and just you know, it's just something that you
don't think about from a day to day, but just
like just grabbing a cup of water to drink it,
you don't think about that when you don't have a
spinal cord injury. But being able to lose that function
and then being able to get it back seems rather meaningful.
Speaker 3 (05:33):
Oh, I imagine just being able to grasp a zipper
and put your pants on by yourself, or or or
manipulate the buttons on a shirt. So these things are
really difference making in a person's life and also to
the healthcare system overall. People with spartal cord injury are
expensive to care for. They're heavy utilizers of the system.
(05:56):
They require a lot of expensive outside assistance and working
to offset some of those costs while we're seeking to
introduce again more independence and privacy and dignity into into
those the lives of those injured.
Speaker 1 (06:12):
Yeah, and it's interesting that the costs analysis of it
as well, because you talked about, you know, the rehabilitation
was about three months and then they're you know, they're
off on their own. Is there something where there's almost
do they Is there some point where there's a one
month in the first month, maybe they see improvement in
their function and strength, and then after they leave rehabilitation
(06:34):
they kind of regress back to where they were when
they had this final cord injury.
Speaker 3 (06:39):
Well, if you talk about are you speaking of the
window after the injury or what we observed in the study.
Speaker 1 (06:45):
Yeah, after rehabilitation alone.
Speaker 3 (06:46):
Yeah, oh yeah, So rehab alone after the injury, it
can plateau after one month or three months, but it
normally plastered toes quite quickly, and then the person is
left with that sort of static level of function, and
there are things they can do to maintain that function,
to maintain flexibility, range of motion, whatever strength they have,
(07:09):
but they're they're Heretofore, has not been anything that can
introduce improvements in strength, improvements in function until until archaex.
Speaker 1 (07:19):
Y and so I guess with then that kind of
goes into my follow up question there because it was
was arc ex able to show more sustainable improvements in
those functions after the initial one month and going beyond
that one month.
Speaker 3 (07:35):
So the way the study was designed, we included those
who had chronic injury and the average time since injury
for the participants was six years. So these are folks
that were brought back into the clinic who re engaged
with real rehabilitation for two months. So it's a four
month study. Two months with rehabilitation alone, two months with
(07:56):
rehabilitation plus archaex therapy or stimul and what was observed
was that there was some improvement with rehabilitation alone, but
it plateaued after about a month, and then once stimulation
was introduced, we saw improvements throughout without a plateau. And
so the investigators are keen to get access to the
(08:19):
therapy again so that they can offer their patients sustained
or continued access to the device so they can continue
to observe gains and to sustain the gains that were made.
Speaker 1 (08:32):
Okay, and that was the data I think I saw
in the journal article that it was like the significance
that those non responders and rehabilitation alone were able to
respond to the arc ex and that that kind of
there was correct me if I'm wrong, There was like
a sixty percent of the patients in rehab alone were
(08:53):
able to respond to the rehab during that one month period,
but then that increased to maybe over seventy percent when
you had X and that was significantly or statistically significant.
Speaker 2 (09:05):
Correct.
Speaker 3 (09:06):
The nature of medicine paper is really instructive. There's some
graphs there that are very helpful, but what you observe
is that some of the participants showed some improvement for
the first month when they were on rehab alone, Okay,
because they hadn't been in rehab for many years and
then it plateaued, and then we introduced ARCHAEX therapy and
(09:27):
you saw a rapid improvement that was sustained through the
study and they were continuing to make gains until the
final week of the study. So that's why, again, the
SEI community is excited to have access to the therapy
because they believe that continued access to the therapy will
allow for continued gains over time.
Speaker 1 (09:48):
Yeah, and maybe why don't we take a quick pause
here just to talk about theex device itself, How does
it work with the patient, what is implanted into the patient,
and just you know, because we're talking about sustainability, so
this is something that this patient will be able to
use outside of you know, the physician's office. Correct.
Speaker 3 (10:10):
Yeah, this is a small table top device. It's about
the size of a tablet computer, albeit a bit thicker,
and it's designed to be used episodically, so for an
hour a day or an hour a few times a
week when it's on, it enables a person to move
in a way they otherwise could not, and by training
(10:33):
performing that movement for an hour a day, they regain strength, function,
and sensation. That's what the study showed, and the idea
here is that a person will have access to the
device in a rehabilitation clinic for one, two, maybe three months,
and thereafter the clinician will prescribe use of the device
(10:55):
at home, where it will be far more convenient for
the person to use it on a daily basis. You
can imagine it's particularly difficult for somebody with tetropoligia to
find their way to the clinic on a regular basis.
But also the person would then have the freedom to
use the device to practice an activity that's interesting to them. So,
(11:16):
for example, in one of the publications media publications that
followed the Nature Medicine paper, it detailed how a gentleman
in Seattle, Washington, who had exposure to the therapy at University
of Washington, was using it to regain the ability to
play guitar, which was his joy.
Speaker 2 (11:34):
And so that's the whole idea.
Speaker 3 (11:37):
Just going back to the beginning of my response, it's
a tabletop device. It connects to leads that are placed
on the skin near the area of the spinal cord
that's responsible for controlling a given movement. So the cervical
spinal cord controls the hands and arms, So we're putting
a couple of leads on the neck. So this is
a fully external device. Nothing is implanted with the ARCHAX.
Speaker 1 (12:00):
Interesting. Yeah, so I guess, yeah, ex is external, and
I know we're going to dive deeper into your other
the rest of your product portfolio for the arc EX.
You also announced that you submitted your Denovo application. What
are the next steps now between both the publication of
(12:21):
this journal article, your Denovo application and eventually getting I
guess it would be Denovo approval and commercialization and then
kind of just a quick follow up there too. Why
a Denovo applicant application compared to kind of the traditional
PMA approach for the FDA.
Speaker 3 (12:41):
Yeah, maybe i'll take that one first. So this is
an external device. It's a non significant risk device, and
so it's Class two. For a non significant risk device
like this, there are two paths. The most common path
is five to ten K and that's what's used if
there's what's called a predicate.
Speaker 2 (13:03):
So there's a device that's.
Speaker 3 (13:04):
Already been approved previously, it's similar to this, share some
characteristics and that can be referenced if there is no predicate,
and that's the case with our chae Exit really is
a revolutionary device. Then one takes what's called the Denovo pathway.
So that's why we chose Denovo. This is a non
significant risk device for which there is no predicate. We
(13:28):
submitted the application at the end of March, so at
the end of the first quarter of this year, and
the FDA it's guidelines for a Denovo is that they
take typically five months plus whatever time is required for
the company to respond to questions that arise during the review.
So we would say conservatively it's a six to eight
(13:51):
month process, with the clock starting April one. So we've
been guiding that we expect FDA clearance in the four
quarter of this year, and that means it would be
our first commercial sale, our first revenues as a company,
and most importantly, this really compelling and helpful therapy will
be available to people in the US starting in the
(14:12):
fourth quarter. That's our current expectation.
Speaker 1 (14:16):
Okay, and so maybe we'll just keep going with the
commercialization train of thought here, and you know, with the
approval commercialization coming out late this year early next year,
you start rolling it out. Who are the key doctors
or centers that you're targeting first?
Speaker 3 (14:34):
Yeah, Well, the good news here, Matt, is that the
people with spinal cord injury are cared for in a
limited number of specialized clinics. They're not terribly fragmented or diffuse.
And these include the military hospital system, the VA hospital system,
where they're organized into hubbs and spokes, so they're twenty
(14:57):
five hub centers that specialize in SCI care within the VA.
There's certainly going to be a focus of ours because
roughly fifteen percent of the population, the paralyzed population of
the US has cared for within the VA system. We're
also going to going to go back to our Uplift
pivotal study sites. They know the system, they have experience
(15:20):
with it, they're keen to have it available to a
broader set of patients. And then lastly, we're going to
target just high volume influential centers. This is our first
set of targets, we would say, our.
Speaker 2 (15:35):
Tier one centers.
Speaker 3 (15:37):
Beyond that we can quickly expand to SCI spokes and
other SCI clinics who care for people with paralysis.
Speaker 1 (15:46):
Yeah, and so you know, how does reimbursement play a
role in getting this out? I mean, is that another
step that will need to be done? Maybe in twenty
twenty five, or is there some code that's already in
place that kind of allows it to kind of get
the ball rolling quicker.
Speaker 3 (16:04):
Good question, Matt. There is no code for this because
it's so new and different and revolutionary. So our approach
is to initially target populations and providers for whom a
code is not needed. So that would be the VA,
those covered by workers compensation benefits schemes. And we think
(16:26):
a certain percentage of people with spark cord injury can
buy the device directly, self pay, as it were, and
that will allow us to demonstrate real world pricing history
and document that before we apply to CMS for a code. Now,
this is a DME product, durable medical equipment, so it
(16:50):
would fall under what's called a Hickpicks code, and we
want to have that real world pricing experience before we
apply for one of these hick Picks codes. And it
shouldn't take long. It should be within let's say a
year eighteen months to get the code, at which point
the device would be eligible for Medicare reimbursement. And then
(17:13):
you have the private payers out there, the et NUS,
the United and so on. Normally they follow medicare. But
in this case the data are so compelling, and the
people with spint cord injury have such profound needs. I'm
hopeful that the private payers will pay for it even
in the first phase.
Speaker 1 (17:34):
But we'll see, yeah, and kind of you'll have to look.
I mean this the cost benefit economic benefit data that's
going to be looking at quality of life because although
you know, it might be a more expensive procedure being
able to do things again independently, where we're talking about,
you know, being able to lift a glass of water,
zipping your pants up, buying in your shirt, all those
(17:56):
quality of life functions should have some you know benefit
that even if the cost of it is above the
rehabilitation alone should be able to justify it.
Speaker 2 (18:07):
Correct.
Speaker 3 (18:09):
Oh, yes, and again rehabilitation alone isn't an option for
those who have chronic injuries that are more than six
months to a year after their injury. And so really
we're looking at the cost for someone to feed his
or herself versus have somebody come from the outside to
do it, or have a spouser partner for go and
(18:29):
income to stay home to do it. So there really
is a huge impact on quality of life and potential
economic offset here that's only going to grow as we
add to the label and we look at things like
bladder and bowel function that right now are hugely problematic
after spinal cord injury. In order to urinate, people with
(18:54):
spinal cord injury have to insert a catheter each time
or have a caregiver insert a catheter each time, which
can lead to frequent infection, frequent use of antibiotics, frequent hospitalization.
You know, this is is a very very tough injury.
And uh and we're we're quite keen to introduce more
(19:14):
therapies and expand the label to help these folks live
better lives.
Speaker 1 (19:19):
Yeah, and you know, you always forget about the opportunity
costs of you know, having a spouse having to you
forego a certain amount of income because they have to
help out their husband or wife. The landscape of spinal
cord injury itself, ignoring the you know, the initial commercialization
and the reimbursement that steps. What are the incident rates
(19:41):
or the prevalence rates of these injuries? You and you know,
we kind of already talked about some of the lifetime
costs for these patients, But why is it so important
to have you know these patients be able to be treated.
Speaker 3 (19:56):
Well, we just our first two markets are the US
and Europe, and they're six hundred and fifty thousand people
with spinal cord injury in the US and Europe, about
seventy five thousand additional injuries per year.
Speaker 2 (20:11):
The global numbers.
Speaker 3 (20:15):
Sometimes they're reported at seven million, sometimes as many as
fifteen million, so there are a lot of people that
are impacted.
Speaker 2 (20:23):
In the US, the.
Speaker 3 (20:24):
Average lifetime costs to support someone with tetrapoleigia, meaning they've
broken their necks and they have impaired hand and arm
function and leg function, it exceeds five million dollars. So
it's a really expensive injury and a devastating injury. We've
talked about this.
Speaker 2 (20:45):
A bit before.
Speaker 3 (20:47):
Most people associate spinal cord injury with paralysis and loss
of sensation, but depending on the location of injury, it
comes with many many other challenges. Difficulty breathing, difficulty regul
relating one's temperature, difficulty going to the bathroom independently, loss
of sexual function, difficulty regulating one's blood pressure. All of
(21:10):
these are contributors to quality of life, and fortunately, our
therapies that have the potential to help in nearly all
of these areas.
Speaker 1 (21:19):
Yeah, and you know, we talk about the opportunity both
the US but also in Europe. We haven't talked about
any potential guide timelines for the European regulatory approval and commercialization.
Is that something that will be kind of after the
US launch or nearly after the US launch, or well,
what's the timeline there?
Speaker 3 (21:39):
It will be after US launch. You know, these things
tend to work in a bit of a pendulum. Some decades,
it's easier and faster to get regulatory approval and commercialized
in Europe. Some decades it's easier and faster to do
so in the US. We happen to be in a
US decade where it just is a lot more straightforward
and faster to get FDA approval and commercialized the US.
(22:00):
So that's why we've been guiding that we expect to
commercialize in the US in the fourth quarter of this
year and in Europe sometime in twenty twenty five, likely
the middle of twenty twenty five or Q three. The
reason being is that the Medical Device Regulation or MDR
in Europe, they just need more information, some of which
(22:21):
just is not available until fairly late in the game,
more data on manufacturing plans and so on. So that's
why it's US first, Europe second, and Europe will come
likely mid to.
Speaker 2 (22:32):
Late next year.
Speaker 1 (22:33):
No, you're absolutely right, though, I mean, I've seen that
shift happen at once the MDR was implemented, and just
you know, you're not the first company that said, you know,
we needed more data that we couldn't produce until we
were kind of already approved in the US, and once
we build that data set out, then we could be
able to get the ce Mark approval. Yeah.
Speaker 3 (22:52):
And actually the tragedy for the population is that there
are a lot of companies that are just electing not
to commercialize in Europe out all right now. And that's
it's a reasonable conclusion to draw a reasonable reasonable plan
given the challenges associated with MDR. We just made the
decision as a mission driven company that you know, there
(23:15):
are several hundred thousand people in Europe with spintal cord injury.
We're going to do what it takes to commercialize here,
but in a smart way.
Speaker 1 (23:23):
Yeah, and you know, it's something where the extra steps
seem to be worth it given how unprecedented this technology is.
To be able to treat these patients. And it's also
the but you know, we also there's we were talking
about that there's more to the pipeline earlier, so let's
talk about what's more in the pipeline. You also have
(23:45):
rc I AM and you have also rc B c I.
Why don't we start diving into those products, and you
know how you're planning to develop those products and what
are the next steps there?
Speaker 3 (23:57):
Oh with pleasure, So yeah, we have our own purpose
designed neurostimulator and planted neurostimulator we call ARCIM and it
connects to our own purpose design family of leads that
sit on top of the spinal cord and once again
they stimulate the spinal cord in the area it's responsible
(24:17):
for a given function. And we've been using RCM in
human since May of twenty twenty two, so we've been
able to gather an increasing body of experience with the device.
We're currently using RCIM therapy to explore its safety and
effectiveness in helping people walk again, helping people move their
(24:40):
hands and arms again, also better regulating blood pressure, and
then this year we'll also be looking at bladder control.
So all of those are in clinical feasibility studies. In addition,
we have clinical feasibility studies with the device looking at
freezing of gait in Parkinson's disease patients as well. And
(25:04):
we've also been combining our RCIM platform, whether a planeted
brain computer interface or BCI, to study whether we can
introduce thought driven restoration of movement, which is more natural,
more organic than is restoring movement with spintal cord stimulation alone.
Speaker 2 (25:25):
So those are two we.
Speaker 3 (25:27):
Think it's an overworn term, but very exciting technology platforms
that can help a lot of people in ways that
again have never before been possible.
Speaker 1 (25:39):
Well, and let's yeah, there's a lot to kind of
go through there. But I'm kind of curious about it
about the BCI. You were discussing it with me during
the last call we had together. But what's the mechanism
for the BCI component to be able to have signals
from the brain reach the injured part of the spinal cord.
Speaker 3 (26:03):
So there's been a lot about BCIs in the news lately.
That's because one of Elon Musk's companies, called Neuralink, is
in the space, and so he tends to generate a
lot of attention. But there are at least ten companies
or entities who are seeking to develop these BCIs, and
(26:25):
they have different forms and they have different ways of
recording brain signals. Some of them are external, some of
them are epidural, some of them are penetrative, one of
them is intravascular. They're all trying to get a device
on or in or around the motor cortex because they're
trying to record a person's intention.
Speaker 2 (26:47):
To move something.
Speaker 3 (26:49):
In this case, all the other companies are focused on
using one's thoughts to control a computer peripheral like a keyboard,
a mouse, or a voice generator. We're the only ones
who are able to use these brain recordings to restore
movement of the human body. So at this point we've
(27:11):
we've partnered with a group out of France called CEA Clintech,
and they have a device that sits on top of
the motor cortex so it's not as invasive as some others,
and it records these brain signals the intention to move.
Uses AI actually to discern where in the motor cortex
these signals are arising. It then sends those signals to
(27:33):
an external computer that translates them into instructions for our device.
Which then stimulates the spaanna cord to create thought driven movement.
Speaker 1 (27:44):
Okay, and so, but actually it was interesting how you
said the you know, other developments, you know, and I've
seen those Elon Musk or the neurolink videos as well,
with the patient using being able to type out something
with just you know, the thoughts and the neurolink technology.
It's almost but maybe I'm simplifying it, and correct me
(28:05):
if I'm wrong, But yours is also connecting to a
computer system, but that computer system is designed to be
the rc I AM or the RCX, which is then
allowing you to maintain those bodily you know, the strength
and functionality that we're talking about in the legs and
the upper limbs. Is that the right way to think
about it?
Speaker 2 (28:26):
Yeah, that's true.
Speaker 3 (28:27):
The BCI interfaces with computers. Our computer happens to be RCIM,
which is implanted and which is designed to restore movement
after paralysis.
Speaker 1 (28:39):
So that's the differentiating technology there is that you not
only will have the brain interface, but you have also
the stimulator to be able to create that movement that
other people are just trying to do with being able
to type something on the keyboard.
Speaker 2 (28:54):
Exactly correct.
Speaker 3 (28:55):
And we have again a purpose designed, implannable device that's
that's designed to do this, and we now have two
hundred and sixty five issued patents worldwide around our various
neuromodulation technologies. So yeah, this is sustainably differentiating what we
have here. It can help a lot of people, we
(29:16):
think potentially. But you know, there's there's a ways to
go with this b c I enabled system, this arc BCI,
it's the probably the thing that's furthest away from reaching
the market. But there have been human proofs of concept already.
There was a Nature paper last year. You know, this
thing really has the potential to work.
Speaker 1 (29:36):
Yeah, and you know with b C I being for
the down the road, which that makes sense because you're
you know, you're connecting to dots and you have to
get the first dot versus the ARC I am. But
you you you mentioned a lot of indications that could
be used for for other mobility, upper limb blood pressure.
(29:59):
We're when we are looking at these, I didn't even
mention the bladder component. When we think about these, you know,
three four or five indications. What are the top priorities
right now? What's coming up first? In the timeline.
Speaker 3 (30:13):
Yeah, So first I say, you know, they're all investigational today.
You know, we're hoping to get our first indication approved.
Speaker 2 (30:20):
Later this year.
Speaker 3 (30:21):
The second thing I want to reinforce is that we
can pursue these indications for the most part, with the
same hardware.
Speaker 2 (30:29):
So there's a lot of leverage in our business model.
Speaker 3 (30:31):
We're just changing the We have different leads, but we're
changing the location of the leads, and we've got a
bit of a different interface that allows the stimulation to
be applied a bit different.
Speaker 2 (30:41):
But we don't have to make.
Speaker 3 (30:43):
Wholesale investments in R and D to pursue all of
these indications. Now, how do we prioritize them? The first
filter is what's important to the people with paralysis. I
think that's absolutely number one. What's most important to them?
What function do they want to see restored?
Speaker 2 (31:04):
And number one for them is hand function.
Speaker 3 (31:07):
That's why you see that as the first indication we're
pursuing with RCHAX or external system, because just a small
increase in hand function introduces a lot of independence and
improvement in quality of life. With the implantable device, the
first indication we're pursuing is blood pressure regulation, So this
is not hypertension. We're not competing with drug companies here
(31:31):
or other alternatives. We're addressing a unique blood pressure dysregulation
that occurs in people with paralysis. Many of them have
very low blood pressure that is exacerbated or made more
severe if they sit upright or try to stand in
a body weight support system or in a stand up frame,
(31:55):
or after they eat, and it really can be debilitating.
So it can take them forty five minutes to an
hour just to transition from bed to chair in the morning.
So this is what we're addressing, and our research partners
in Switzerland have found the exact spot in the thoracic
span of cords of sort of in the torso, which
when stimulated, increases vascular resistance and elevates blood pressure, which
(32:20):
is the goal. And we're starting with that because it's
not a movement related indication. A person doesn't have to
rebuild muscle tone and muscle mass and coordination and train again,
you turn it on and it works. So that's why
it's a pragmatic first indication for the RCIM device, and
then we can follow on with some of the later indications,
(32:43):
some of which do require rehabilitation because there has been
muscle wasting or atrophy because you know these these these
muscles haven't been used for many years.
Speaker 1 (32:55):
Yeah, well, that's interesting that, you know, with blood pressure
being that kind of that pragmatic appro you know, being
able to address that patient population first. But what are
some of the next catalysts for the blood pressure indication.
Speaker 3 (33:10):
We have a lot of upcoming catalysts just as a company.
So there's FDA clearance in first commercial sale of RCX.
But to your question, rc IM also has catalysts. There's
submission of the id so the permission to do the
pivotal study for blood pressure. For rc IM, there's ide approval,
(33:32):
and there's first patient enrollment in the study getting that
pivotal study started. We're calling that empower BP and there
should be between fifteen and twenty sites around the world
enrolling in that in that study.
Speaker 1 (33:47):
Okay, and so is the is the have you submitted
it to the FDA already in your way in approval
or is there still the step of submitting it to
the FDA.
Speaker 3 (33:57):
Yeah, we've not yet submitted the idea application. I also though,
forgot about another catalyst that's rc IM related, and that
is that we should have publication in a top tier
journal of the results from our clinical feasibility studies evaluating
this therapy rc IM therapy and its ability to successfully
(34:21):
address blood pressure dysregulation in this population. So, just to
restate again for R I M, We've got the ID
submission and approval, we have the interim results publication from
the clinical feasibility study, and we have first patient enrollment,
all of which could happen in the next you know,
six seven months.
Speaker 1 (34:40):
Interesting. And so with that, with the interim results, what
what was the yeah, the interim results for this feasibility study?
What what what were the endpoints that you're looking for
to treat these patients or what we what was kind
of the data that you needed to show before going
into the pivotal study itself.
Speaker 3 (34:59):
Yeah, so we've done I'd say there have been fifteen
patients around the world who've received this therapy in some
form or fashion across a few different clinical feasibility studies.
We did release kind of top level outcomes way back
in I think December twenty twenty two, showing that all
(35:19):
of the participants had increased blood pressure, which was of
course the goal. They all had improvements in quality of life,
those who are on meds, reduced or stopped the meds completely,
and so on. So those very promising. What we expect
in the second half of the year, though, is a
much more robust review of the observations and results for
(35:43):
the first fourteen people who've received the therapy, and also
a separate publication that describes the mechanism, why does it work?
How does it work? So I think that both of
these publications are very very important, and we'll advance the
understanding of the problem and our particular solution. We will
(36:05):
be using these data that I described, of course in
our id submission that FDA will use to approve our
commencement of the pivotal study called empower BP.
Speaker 1 (36:16):
Okay, gotcha, and so yeah, I mean there's a lot
of developments going on between now and the next twelve months.
He also announced a few months ago about a new
equity financing. How does that help bridge you from now
until the next step of product launches.
Speaker 3 (36:38):
It just gives us additional runway, Matt. We were pleased
to get that round done. It's still a difficult funding
environment for pre revenue medtech and a lot of the
financing these days are happening with a lot of insider participation,
you know, existing funds that have supported the company or
having to continue supporting the company. We actually only had
(37:01):
fifteen percent participation from our because sort of long standing funds,
and we were able to recruit eighty five percent of
the round came from new, really pedigreed investors from from
the US and Europe. So we were very pleased with
the with that outcome, and it just extended our runway.
(37:21):
It gets us into the middle of next year, gives
us a chance to commercialize RCX and show traction, to
begin the pivotal study empower BP for rc IM, and
show significant progress and enrollment.
Speaker 2 (37:35):
And there's some other things that we're looking at as well.
Speaker 3 (37:37):
So you know, there's if nothing else onward, there's a
lot of newsflow, whether it's from publications or study results
or other things. So we're not going to be quiet
here and we're very busy. There's some more things that
I would expect will be announced in the coming months.
Speaker 1 (37:53):
You know. Another thing that I'm interested in and seeing
your perspective more and more CEOs and all these episodes,
they're talking about a book that kind of influenced them
one way or another, or makes them think of a
new way. I'm curious if there was a book that
you've read a long time ago or recently that's kind
of been able to make you rethink or make you
(38:17):
just make you think about the overall medtech market or
the SEI market in general.
Speaker 3 (38:24):
Well, I'm a big reader, so that's a big topic
for me.
Speaker 2 (38:29):
You know.
Speaker 3 (38:30):
I used to read business books when I was a kid.
Now I just read fiction. Maybe I get enough business
at work. I can remember, though, one book I read
when I was a kid who was in the eighties
Japan was really on the ascendants and the Japanese companies
really revered an American quality expert named W.
Speaker 2 (38:49):
Edwards Deming.
Speaker 3 (38:51):
And the one thing I took from that he was
of the opinion that if a worker made an error,
it was management's fault because management had not trained the
worker correctly or the process wasn't sufficiently robust. That definitely
stuck with me. If anything ever goes wrong here, the
first thing I look at is like, is what could
(39:13):
I have done differently?
Speaker 2 (39:14):
You know?
Speaker 3 (39:15):
Have I created a culture where people can come to
me with problems and speak the truth? You know, Have
we onboarded and trained people correctly? Have we selected people
the right way? Have we set goals the right way?
Are we measuring the right thing? On one hand, it's
super stressful because I take the blame for everything. On
the other hand, it's not because you know, I'm sort
(39:36):
of have agency for everything. You know, there's like a
path to fix it, and me and the leadership team
we have to look at what we could have done
differently for that problem not to surface. But again, now
nowadays I just read fiction, and what I take from
that normally is, first of all, if there's a phenomenal writer,
it's just an evidence of just the capacity of human
(40:00):
kind to do great things, which is in and of
itself inspiring. But I tend to read biography or historical
fictions or books that just have the arc of time
or the arc of a lifetime where there's something I
can learn from a given character that helps me think
about life differently or inspires me in some ways.
Speaker 2 (40:19):
Because being CEO, there are always ups and downs.
Speaker 3 (40:22):
You know, you only get the tough things on your desk,
the tough decisions to make, and it's helpful to sort
of remove oneself from that and see how others have
confronted life's challenges.
Speaker 1 (40:33):
Interesting. Yeah, and you know the demeans I remember that
from my MBA courses being able to Yeah, that you
be able to You could be able to figure out
the problems and be able to figure out the solutions
from the top down approach if you have the right
data and everything. Yeah, that's great. And so we talk
(40:54):
about you know, lifetime arcs. We'll get to now, how
you do see the next five years playing out for
ARC therapy, for neuromodulation technology for spinal cord injury altogether.
Speaker 3 (41:09):
Well, I would be just delighted if we in the
next five years were able to successfully commercialize and scale
RCX and commercialize and scale ARCIM so that those two
platforms were approved and out there for the benefit of
people with spawnal cord injury and and their loved ones,
(41:29):
and that we make significant progress in defining and progressing
in clinical evaluation of RCBCI. Then I'll be super happy.
Speaker 1 (41:41):
Yeah, well, I look forward to that. And Dave, thank
you for joining us today.
Speaker 2 (41:47):
My pleasure.
Speaker 3 (41:48):
Matt, thanks for shining a light on the work we're
doing and on the work of other interesting companies around
the world. And doing it in long form where there's
a chance to dig in and really explain businesses to
investors and others who are interested.
Speaker 1 (42:01):
And thank you to our listeners for tuning in today
and we hope you join us for future episodes. If
you'd like to stay up to date on our podcast,
you can click the subscribe button on Spotify or your
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you can click bi Go on your terminal for research
from over five hundred analysts and strategists working across all
(42:21):
major markets. Take care
Welcome to another exciting episode of the Vanguards of Healthcare
podcast series. My name is Matt Henrickson, the medical technology
analyst at Bloomberg Intelligence, which is the in house equity
research platform of Bloomberg LP. Where pleased to have back
with us today, Dave Marver, CEO of Onward Medical, a
medical device company that is driving the innovation to enable
(00:41):
people with spinal cord injury to move again aided by
their ARC therapy. You can dive deeper into the company
and its financials by typing in O NWD space BB
Equity go on your Bloomberg terminal. Dave, welcome back and
thank you again for joining us.
Speaker 2 (00:58):
Thank you, Matt, it's nice to be here with you.
Speaker 1 (01:01):
And when we were talking, we were touching base back
in late last year. You know, you kind of gave
a great overview of the ARC system, what it's able
to do. But maybe why don't we refresh the listeners
with kind of a quick overview of the technology and
what you're designing it to treat.
Speaker 2 (01:20):
Oh with pleasure.
Speaker 3 (01:21):
So we have three purpose design technology platforms and each
of them stimulates the spinal cord to restore movement or
some other critical function after paralysis after spinal cord injury
and also potentially after Parkinson's disease.
Speaker 1 (01:38):
Okay, great and so And recently though, you've had some
news that came out or a publication about one of
your initial systems, the rc EX. This was for the
UPLIFT study. So maybe why don't we go through and
talk about what the trial was designed for and you know,
what are some of the highlights from of those results.
Speaker 2 (02:01):
Yeah.
Speaker 3 (02:02):
Indeed, so Uplift was the name of our pivotal trial
or Class three trial for those of you from Biotech,
and we conducted it at fourteen leading rehabilitation clinics around
the world.
Speaker 2 (02:14):
The idea was.
Speaker 3 (02:15):
To determine the safety and effectiveness of our rc EX system,
our external neuromodulation system, to determine whether it could improve
the strength and function of the upper extremities in chronic
incomplete spinal cord injury. And we were very pleased just
a couple of weeks ago two that the Nature Medicine
(02:39):
publication on the UPLIFT trial was published and the results
were striking. For example, ninety percent of people improved strength
or function up to thirty four years after respondal cord injury,
eighty seven percent of participants reported improvement in quality of life.
The participants also reported reductions in spasticity, improvements in sleep,
(03:05):
and improvement in sensation touch. So, really, it exceeded all
of our wildest expectations and hopes, and we're really keen
to commercialize this and get it out there, into the
clinic and into the home where it can help people.
Speaker 1 (03:21):
Yeah. No, that ninety percent figure really caught my attention
as well. When you talk about strength or you talk
about you know, the functionality, what does that mean for
someone who has spinal cord injury. I mean, where are
they coming from and what improvements does that entail for
both strength and functionality.
Speaker 3 (03:42):
Well, just to set some context here for those listening. Currently,
if you have a spinal cord injury, you have emergency
surgery and you undergo rehabilitation typically for about three months,
and then you're sent home because there's nothing else that
can be done for you. Those injured usually have that
brief window after the injury to recover function and thereafter
(04:04):
there's been nothing historically that can help them until now.
And that's why it's so important that we have been
able to demonstrate that this archaex therapy can indeed restore
strength and function. The reason we started with upper extremity,
that that's the first indication or recovery target for us,
(04:25):
is because even a small improvement in the function of
one's hands can have a dramatic improvement on one's quality
of life. For example, in the trial, we demonstrate that
the device could improve grasp strength to the extent that
a person could lift a filled glass, or pinch strength
(04:47):
to the extent that they could pick up a fork
with food on it and feed themselves. So it's really
a matter of translating these improvements in strength and function
that we're observed into impact on activities of daily life.
That's the idea to introduce improvements that can result in
greater independence, greater greater privacy for example. That was the goal,
(05:12):
and we're very pleased that the study was a success.
Speaker 1 (05:16):
Yeah, and just you know, it's just something that you
don't think about from a day to day, but just
like just grabbing a cup of water to drink it,
you don't think about that when you don't have a
spinal cord injury. But being able to lose that function
and then being able to get it back seems rather meaningful.
Speaker 3 (05:33):
Oh, I imagine just being able to grasp a zipper
and put your pants on by yourself, or or or
manipulate the buttons on a shirt. So these things are
really difference making in a person's life and also to
the healthcare system overall. People with spartal cord injury are
expensive to care for. They're heavy utilizers of the system.
(05:56):
They require a lot of expensive outside assistance and working
to offset some of those costs while we're seeking to
introduce again more independence and privacy and dignity into into
those the lives of those injured.
Speaker 1 (06:12):
Yeah, and it's interesting that the costs analysis of it
as well, because you talked about, you know, the rehabilitation
was about three months and then they're you know, they're
off on their own. Is there something where there's almost
do they Is there some point where there's a one
month in the first month, maybe they see improvement in
their function and strength, and then after they leave rehabilitation
(06:34):
they kind of regress back to where they were when
they had this final cord injury.
Speaker 3 (06:39):
Well, if you talk about are you speaking of the
window after the injury or what we observed in the study.
Speaker 1 (06:45):
Yeah, after rehabilitation alone.
Speaker 3 (06:46):
Yeah, oh yeah, So rehab alone after the injury, it
can plateau after one month or three months, but it
normally plastered toes quite quickly, and then the person is
left with that sort of static level of function, and
there are things they can do to maintain that function,
to maintain flexibility, range of motion, whatever strength they have,
(07:09):
but they're they're Heretofore, has not been anything that can
introduce improvements in strength, improvements in function until until archaex.
Speaker 1 (07:19):
Y and so I guess with then that kind of
goes into my follow up question there because it was
was arc ex able to show more sustainable improvements in
those functions after the initial one month and going beyond
that one month.
Speaker 3 (07:35):
So the way the study was designed, we included those
who had chronic injury and the average time since injury
for the participants was six years. So these are folks
that were brought back into the clinic who re engaged
with real rehabilitation for two months. So it's a four
month study. Two months with rehabilitation alone, two months with
(07:56):
rehabilitation plus archaex therapy or stimul and what was observed
was that there was some improvement with rehabilitation alone, but
it plateaued after about a month, and then once stimulation
was introduced, we saw improvements throughout without a plateau. And
so the investigators are keen to get access to the
(08:19):
therapy again so that they can offer their patients sustained
or continued access to the device so they can continue
to observe gains and to sustain the gains that were made.
Speaker 1 (08:32):
Okay, and that was the data I think I saw
in the journal article that it was like the significance
that those non responders and rehabilitation alone were able to
respond to the arc ex and that that kind of
there was correct me if I'm wrong, There was like
a sixty percent of the patients in rehab alone were
(08:53):
able to respond to the rehab during that one month period,
but then that increased to maybe over seventy percent when
you had X and that was significantly or statistically significant.
Speaker 2 (09:05):
Correct.
Speaker 3 (09:06):
The nature of medicine paper is really instructive. There's some
graphs there that are very helpful, but what you observe
is that some of the participants showed some improvement for
the first month when they were on rehab alone, Okay,
because they hadn't been in rehab for many years and
then it plateaued, and then we introduced ARCHAEX therapy and
(09:27):
you saw a rapid improvement that was sustained through the
study and they were continuing to make gains until the
final week of the study. So that's why, again, the
SEI community is excited to have access to the therapy
because they believe that continued access to the therapy will
allow for continued gains over time.
Speaker 1 (09:48):
Yeah, and maybe why don't we take a quick pause
here just to talk about theex device itself, How does
it work with the patient, what is implanted into the patient,
and just you know, because we're talking about sustainability, so
this is something that this patient will be able to
use outside of you know, the physician's office. Correct.
Speaker 3 (10:10):
Yeah, this is a small table top device. It's about
the size of a tablet computer, albeit a bit thicker,
and it's designed to be used episodically, so for an
hour a day or an hour a few times a
week when it's on, it enables a person to move
in a way they otherwise could not, and by training
(10:33):
performing that movement for an hour a day, they regain strength, function,
and sensation. That's what the study showed, and the idea
here is that a person will have access to the
device in a rehabilitation clinic for one, two, maybe three months,
and thereafter the clinician will prescribe use of the device
(10:55):
at home, where it will be far more convenient for
the person to use it on a daily basis. You
can imagine it's particularly difficult for somebody with tetropoligia to
find their way to the clinic on a regular basis.
But also the person would then have the freedom to
use the device to practice an activity that's interesting to them. So,
(11:16):
for example, in one of the publications media publications that
followed the Nature Medicine paper, it detailed how a gentleman
in Seattle, Washington, who had exposure to the therapy at University
of Washington, was using it to regain the ability to
play guitar, which was his joy.
Speaker 2 (11:34):
And so that's the whole idea.
Speaker 3 (11:37):
Just going back to the beginning of my response, it's
a tabletop device. It connects to leads that are placed
on the skin near the area of the spinal cord
that's responsible for controlling a given movement. So the cervical
spinal cord controls the hands and arms, So we're putting
a couple of leads on the neck. So this is
a fully external device. Nothing is implanted with the ARCHAX.
Speaker 1 (12:00):
Interesting. Yeah, so I guess, yeah, ex is external, and
I know we're going to dive deeper into your other
the rest of your product portfolio for the arc EX.
You also announced that you submitted your Denovo application. What
are the next steps now between both the publication of
(12:21):
this journal article, your Denovo application and eventually getting I
guess it would be Denovo approval and commercialization and then
kind of just a quick follow up there too. Why
a Denovo applicant application compared to kind of the traditional
PMA approach for the FDA.
Speaker 3 (12:41):
Yeah, maybe i'll take that one first. So this is
an external device. It's a non significant risk device, and
so it's Class two. For a non significant risk device
like this, there are two paths. The most common path
is five to ten K and that's what's used if
there's what's called a predicate.
Speaker 2 (13:03):
So there's a device that's.
Speaker 3 (13:04):
Already been approved previously, it's similar to this, share some
characteristics and that can be referenced if there is no predicate,
and that's the case with our chae Exit really is
a revolutionary device. Then one takes what's called the Denovo pathway.
So that's why we chose Denovo. This is a non
significant risk device for which there is no predicate. We
(13:28):
submitted the application at the end of March, so at
the end of the first quarter of this year, and
the FDA it's guidelines for a Denovo is that they
take typically five months plus whatever time is required for
the company to respond to questions that arise during the review.
So we would say conservatively it's a six to eight
(13:51):
month process, with the clock starting April one. So we've
been guiding that we expect FDA clearance in the four
quarter of this year, and that means it would be
our first commercial sale, our first revenues as a company,
and most importantly, this really compelling and helpful therapy will
be available to people in the US starting in the
(14:12):
fourth quarter. That's our current expectation.
Speaker 1 (14:16):
Okay, and so maybe we'll just keep going with the
commercialization train of thought here, and you know, with the
approval commercialization coming out late this year early next year,
you start rolling it out. Who are the key doctors
or centers that you're targeting first?
Speaker 3 (14:34):
Yeah, Well, the good news here, Matt, is that the
people with spinal cord injury are cared for in a
limited number of specialized clinics. They're not terribly fragmented or diffuse.
And these include the military hospital system, the VA hospital system,
where they're organized into hubbs and spokes, so they're twenty
(14:57):
five hub centers that specialize in SCI care within the VA.
There's certainly going to be a focus of ours because
roughly fifteen percent of the population, the paralyzed population of
the US has cared for within the VA system. We're
also going to going to go back to our Uplift
pivotal study sites. They know the system, they have experience
(15:20):
with it, they're keen to have it available to a
broader set of patients. And then lastly, we're going to
target just high volume influential centers. This is our first
set of targets, we would say, our.
Speaker 2 (15:35):
Tier one centers.
Speaker 3 (15:37):
Beyond that we can quickly expand to SCI spokes and
other SCI clinics who care for people with paralysis.
Speaker 1 (15:46):
Yeah, and so you know, how does reimbursement play a
role in getting this out? I mean, is that another
step that will need to be done? Maybe in twenty
twenty five, or is there some code that's already in
place that kind of allows it to kind of get
the ball rolling quicker.
Speaker 3 (16:04):
Good question, Matt. There is no code for this because
it's so new and different and revolutionary. So our approach
is to initially target populations and providers for whom a
code is not needed. So that would be the VA,
those covered by workers compensation benefits schemes. And we think
(16:26):
a certain percentage of people with spark cord injury can
buy the device directly, self pay, as it were, and
that will allow us to demonstrate real world pricing history
and document that before we apply to CMS for a code. Now,
this is a DME product, durable medical equipment, so it
(16:50):
would fall under what's called a Hickpicks code, and we
want to have that real world pricing experience before we
apply for one of these hick Picks codes. And it
shouldn't take long. It should be within let's say a
year eighteen months to get the code, at which point
the device would be eligible for Medicare reimbursement. And then
(17:13):
you have the private payers out there, the et NUS,
the United and so on. Normally they follow medicare. But
in this case the data are so compelling, and the
people with spint cord injury have such profound needs. I'm
hopeful that the private payers will pay for it even
in the first phase.
Speaker 1 (17:34):
But we'll see, yeah, and kind of you'll have to look.
I mean this the cost benefit economic benefit data that's
going to be looking at quality of life because although
you know, it might be a more expensive procedure being
able to do things again independently, where we're talking about,
you know, being able to lift a glass of water,
zipping your pants up, buying in your shirt, all those
(17:56):
quality of life functions should have some you know benefit
that even if the cost of it is above the
rehabilitation alone should be able to justify it.
Speaker 2 (18:07):
Correct.
Speaker 3 (18:09):
Oh, yes, and again rehabilitation alone isn't an option for
those who have chronic injuries that are more than six
months to a year after their injury. And so really
we're looking at the cost for someone to feed his
or herself versus have somebody come from the outside to
do it, or have a spouser partner for go and
(18:29):
income to stay home to do it. So there really
is a huge impact on quality of life and potential
economic offset here that's only going to grow as we
add to the label and we look at things like
bladder and bowel function that right now are hugely problematic
after spinal cord injury. In order to urinate, people with
(18:54):
spinal cord injury have to insert a catheter each time
or have a caregiver insert a catheter each time, which
can lead to frequent infection, frequent use of antibiotics, frequent hospitalization.
You know, this is is a very very tough injury.
And uh and we're we're quite keen to introduce more
(19:14):
therapies and expand the label to help these folks live
better lives.
Speaker 1 (19:19):
Yeah, and you know, you always forget about the opportunity
costs of you know, having a spouse having to you
forego a certain amount of income because they have to
help out their husband or wife. The landscape of spinal
cord injury itself, ignoring the you know, the initial commercialization
and the reimbursement that steps. What are the incident rates
(19:41):
or the prevalence rates of these injuries? You and you know,
we kind of already talked about some of the lifetime
costs for these patients, But why is it so important
to have you know these patients be able to be treated.
Speaker 3 (19:56):
Well, we just our first two markets are the US
and Europe, and they're six hundred and fifty thousand people
with spinal cord injury in the US and Europe, about
seventy five thousand additional injuries per year.
Speaker 2 (20:11):
The global numbers.
Speaker 3 (20:15):
Sometimes they're reported at seven million, sometimes as many as
fifteen million, so there are a lot of people that
are impacted.
Speaker 2 (20:23):
In the US, the.
Speaker 3 (20:24):
Average lifetime costs to support someone with tetrapoleigia, meaning they've
broken their necks and they have impaired hand and arm
function and leg function, it exceeds five million dollars. So
it's a really expensive injury and a devastating injury. We've
talked about this.
Speaker 2 (20:45):
A bit before.
Speaker 3 (20:47):
Most people associate spinal cord injury with paralysis and loss
of sensation, but depending on the location of injury, it
comes with many many other challenges. Difficulty breathing, difficulty regul
relating one's temperature, difficulty going to the bathroom independently, loss
of sexual function, difficulty regulating one's blood pressure. All of
(21:10):
these are contributors to quality of life, and fortunately, our
therapies that have the potential to help in nearly all
of these areas.
Speaker 1 (21:19):
Yeah, and you know, we talk about the opportunity both
the US but also in Europe. We haven't talked about
any potential guide timelines for the European regulatory approval and commercialization.
Is that something that will be kind of after the
US launch or nearly after the US launch, or well,
what's the timeline there?
Speaker 3 (21:39):
It will be after US launch. You know, these things
tend to work in a bit of a pendulum. Some decades,
it's easier and faster to get regulatory approval and commercialized
in Europe. Some decades it's easier and faster to do
so in the US. We happen to be in a
US decade where it just is a lot more straightforward
and faster to get FDA approval and commercialized the US.
(22:00):
So that's why we've been guiding that we expect to
commercialize in the US in the fourth quarter of this
year and in Europe sometime in twenty twenty five, likely
the middle of twenty twenty five or Q three. The
reason being is that the Medical Device Regulation or MDR
in Europe, they just need more information, some of which
(22:21):
just is not available until fairly late in the game,
more data on manufacturing plans and so on. So that's
why it's US first, Europe second, and Europe will come
likely mid to.
Speaker 2 (22:32):
Late next year.
Speaker 1 (22:33):
No, you're absolutely right, though, I mean, I've seen that
shift happen at once the MDR was implemented, and just
you know, you're not the first company that said, you know,
we needed more data that we couldn't produce until we
were kind of already approved in the US, and once
we build that data set out, then we could be
able to get the ce Mark approval. Yeah.
Speaker 3 (22:52):
And actually the tragedy for the population is that there
are a lot of companies that are just electing not
to commercialize in Europe out all right now. And that's
it's a reasonable conclusion to draw a reasonable reasonable plan
given the challenges associated with MDR. We just made the
decision as a mission driven company that you know, there
(23:15):
are several hundred thousand people in Europe with spintal cord injury.
We're going to do what it takes to commercialize here,
but in a smart way.
Speaker 1 (23:23):
Yeah, and you know, it's something where the extra steps
seem to be worth it given how unprecedented this technology is.
To be able to treat these patients. And it's also
the but you know, we also there's we were talking
about that there's more to the pipeline earlier, so let's
talk about what's more in the pipeline. You also have
(23:45):
rc I AM and you have also rc B c I.
Why don't we start diving into those products, and you
know how you're planning to develop those products and what
are the next steps there?
Speaker 3 (23:57):
Oh with pleasure, So yeah, we have our own purpose
designed neurostimulator and planted neurostimulator we call ARCIM and it
connects to our own purpose design family of leads that
sit on top of the spinal cord and once again
they stimulate the spinal cord in the area it's responsible
(24:17):
for a given function. And we've been using RCM in
human since May of twenty twenty two, so we've been
able to gather an increasing body of experience with the device.
We're currently using RCIM therapy to explore its safety and
effectiveness in helping people walk again, helping people move their
(24:40):
hands and arms again, also better regulating blood pressure, and
then this year we'll also be looking at bladder control.
So all of those are in clinical feasibility studies. In addition,
we have clinical feasibility studies with the device looking at
freezing of gait in Parkinson's disease patients as well. And
(25:04):
we've also been combining our RCIM platform, whether a planeted
brain computer interface or BCI, to study whether we can
introduce thought driven restoration of movement, which is more natural,
more organic than is restoring movement with spintal cord stimulation alone.
Speaker 2 (25:25):
So those are two we.
Speaker 3 (25:27):
Think it's an overworn term, but very exciting technology platforms
that can help a lot of people in ways that
again have never before been possible.
Speaker 1 (25:39):
Well, and let's yeah, there's a lot to kind of
go through there. But I'm kind of curious about it
about the BCI. You were discussing it with me during
the last call we had together. But what's the mechanism
for the BCI component to be able to have signals
from the brain reach the injured part of the spinal cord.
Speaker 3 (26:03):
So there's been a lot about BCIs in the news lately.
That's because one of Elon Musk's companies, called Neuralink, is
in the space, and so he tends to generate a
lot of attention. But there are at least ten companies
or entities who are seeking to develop these BCIs, and
(26:25):
they have different forms and they have different ways of
recording brain signals. Some of them are external, some of
them are epidural, some of them are penetrative, one of
them is intravascular. They're all trying to get a device
on or in or around the motor cortex because they're
trying to record a person's intention.
Speaker 2 (26:47):
To move something.
Speaker 3 (26:49):
In this case, all the other companies are focused on
using one's thoughts to control a computer peripheral like a keyboard,
a mouse, or a voice generator. We're the only ones
who are able to use these brain recordings to restore
movement of the human body. So at this point we've
(27:11):
we've partnered with a group out of France called CEA Clintech,
and they have a device that sits on top of
the motor cortex so it's not as invasive as some others,
and it records these brain signals the intention to move.
Uses AI actually to discern where in the motor cortex
these signals are arising. It then sends those signals to
(27:33):
an external computer that translates them into instructions for our device.
Which then stimulates the spaanna cord to create thought driven movement.
Speaker 1 (27:44):
Okay, and so, but actually it was interesting how you
said the you know, other developments, you know, and I've
seen those Elon Musk or the neurolink videos as well,
with the patient using being able to type out something
with just you know, the thoughts and the neurolink technology.
It's almost but maybe I'm simplifying it, and correct me
(28:05):
if I'm wrong, But yours is also connecting to a
computer system, but that computer system is designed to be
the rc I AM or the RCX, which is then
allowing you to maintain those bodily you know, the strength
and functionality that we're talking about in the legs and
the upper limbs. Is that the right way to think
about it?
Speaker 2 (28:26):
Yeah, that's true.
Speaker 3 (28:27):
The BCI interfaces with computers. Our computer happens to be RCIM,
which is implanted and which is designed to restore movement
after paralysis.
Speaker 1 (28:39):
So that's the differentiating technology there is that you not
only will have the brain interface, but you have also
the stimulator to be able to create that movement that
other people are just trying to do with being able
to type something on the keyboard.
Speaker 2 (28:54):
Exactly correct.
Speaker 3 (28:55):
And we have again a purpose designed, implannable device that's
that's designed to do this, and we now have two
hundred and sixty five issued patents worldwide around our various
neuromodulation technologies. So yeah, this is sustainably differentiating what we
have here. It can help a lot of people, we
(29:16):
think potentially. But you know, there's there's a ways to
go with this b c I enabled system, this arc BCI,
it's the probably the thing that's furthest away from reaching
the market. But there have been human proofs of concept already.
There was a Nature paper last year. You know, this
thing really has the potential to work.
Speaker 1 (29:36):
Yeah, and you know with b C I being for
the down the road, which that makes sense because you're
you know, you're connecting to dots and you have to
get the first dot versus the ARC I am. But
you you you mentioned a lot of indications that could
be used for for other mobility, upper limb blood pressure.
(29:59):
We're when we are looking at these, I didn't even
mention the bladder component. When we think about these, you know,
three four or five indications. What are the top priorities
right now? What's coming up first? In the timeline.
Speaker 3 (30:13):
Yeah, So first I say, you know, they're all investigational today.
You know, we're hoping to get our first indication approved.
Speaker 2 (30:20):
Later this year.
Speaker 3 (30:21):
The second thing I want to reinforce is that we
can pursue these indications for the most part, with the
same hardware.
Speaker 2 (30:29):
So there's a lot of leverage in our business model.
Speaker 3 (30:31):
We're just changing the We have different leads, but we're
changing the location of the leads, and we've got a
bit of a different interface that allows the stimulation to
be applied a bit different.
Speaker 2 (30:41):
But we don't have to make.
Speaker 3 (30:43):
Wholesale investments in R and D to pursue all of
these indications. Now, how do we prioritize them? The first
filter is what's important to the people with paralysis. I
think that's absolutely number one. What's most important to them?
What function do they want to see restored?
Speaker 2 (31:04):
And number one for them is hand function.
Speaker 3 (31:07):
That's why you see that as the first indication we're
pursuing with RCHAX or external system, because just a small
increase in hand function introduces a lot of independence and
improvement in quality of life. With the implantable device, the
first indication we're pursuing is blood pressure regulation, So this
is not hypertension. We're not competing with drug companies here
(31:31):
or other alternatives. We're addressing a unique blood pressure dysregulation
that occurs in people with paralysis. Many of them have
very low blood pressure that is exacerbated or made more
severe if they sit upright or try to stand in
a body weight support system or in a stand up frame,
(31:55):
or after they eat, and it really can be debilitating.
So it can take them forty five minutes to an
hour just to transition from bed to chair in the morning.
So this is what we're addressing, and our research partners
in Switzerland have found the exact spot in the thoracic
span of cords of sort of in the torso, which
when stimulated, increases vascular resistance and elevates blood pressure, which
(32:20):
is the goal. And we're starting with that because it's
not a movement related indication. A person doesn't have to
rebuild muscle tone and muscle mass and coordination and train again,
you turn it on and it works. So that's why
it's a pragmatic first indication for the RCIM device, and
then we can follow on with some of the later indications,
(32:43):
some of which do require rehabilitation because there has been
muscle wasting or atrophy because you know these these these
muscles haven't been used for many years.
Speaker 1 (32:55):
Yeah, well, that's interesting that, you know, with blood pressure
being that kind of that pragmatic appro you know, being
able to address that patient population first. But what are
some of the next catalysts for the blood pressure indication.
Speaker 3 (33:10):
We have a lot of upcoming catalysts just as a company.
So there's FDA clearance in first commercial sale of RCX.
But to your question, rc IM also has catalysts. There's
submission of the id so the permission to do the
pivotal study for blood pressure. For rc IM, there's ide approval,
(33:32):
and there's first patient enrollment in the study getting that
pivotal study started. We're calling that empower BP and there
should be between fifteen and twenty sites around the world
enrolling in that in that study.
Speaker 1 (33:47):
Okay, and so is the is the have you submitted
it to the FDA already in your way in approval
or is there still the step of submitting it to
the FDA.
Speaker 3 (33:57):
Yeah, we've not yet submitted the idea application. I also though,
forgot about another catalyst that's rc IM related, and that
is that we should have publication in a top tier
journal of the results from our clinical feasibility studies evaluating
this therapy rc IM therapy and its ability to successfully
(34:21):
address blood pressure dysregulation in this population. So, just to
restate again for R I M, We've got the ID
submission and approval, we have the interim results publication from
the clinical feasibility study, and we have first patient enrollment,
all of which could happen in the next you know,
six seven months.
Speaker 1 (34:40):
Interesting. And so with that, with the interim results, what
what was the yeah, the interim results for this feasibility study?
What what what were the endpoints that you're looking for
to treat these patients or what we what was kind
of the data that you needed to show before going
into the pivotal study itself.
Speaker 3 (34:59):
Yeah, so we've done I'd say there have been fifteen
patients around the world who've received this therapy in some
form or fashion across a few different clinical feasibility studies.
We did release kind of top level outcomes way back
in I think December twenty twenty two, showing that all
(35:19):
of the participants had increased blood pressure, which was of
course the goal. They all had improvements in quality of life,
those who are on meds, reduced or stopped the meds completely,
and so on. So those very promising. What we expect
in the second half of the year, though, is a
much more robust review of the observations and results for
(35:43):
the first fourteen people who've received the therapy, and also
a separate publication that describes the mechanism, why does it work?
How does it work? So I think that both of
these publications are very very important, and we'll advance the
understanding of the problem and our particular solution. We will
(36:05):
be using these data that I described, of course in
our id submission that FDA will use to approve our
commencement of the pivotal study called empower BP.
Speaker 1 (36:16):
Okay, gotcha, and so yeah, I mean there's a lot
of developments going on between now and the next twelve months.
He also announced a few months ago about a new
equity financing. How does that help bridge you from now
until the next step of product launches.
Speaker 3 (36:38):
It just gives us additional runway, Matt. We were pleased
to get that round done. It's still a difficult funding
environment for pre revenue medtech and a lot of the
financing these days are happening with a lot of insider participation,
you know, existing funds that have supported the company or
having to continue supporting the company. We actually only had
(37:01):
fifteen percent participation from our because sort of long standing funds,
and we were able to recruit eighty five percent of
the round came from new, really pedigreed investors from from
the US and Europe. So we were very pleased with
the with that outcome, and it just extended our runway.
(37:21):
It gets us into the middle of next year, gives
us a chance to commercialize RCX and show traction, to
begin the pivotal study empower BP for rc IM, and
show significant progress and enrollment.
Speaker 2 (37:35):
And there's some other things that we're looking at as well.
Speaker 3 (37:37):
So you know, there's if nothing else onward, there's a
lot of newsflow, whether it's from publications or study results
or other things. So we're not going to be quiet
here and we're very busy. There's some more things that
I would expect will be announced in the coming months.
Speaker 1 (37:53):
You know. Another thing that I'm interested in and seeing
your perspective more and more CEOs and all these episodes,
they're talking about a book that kind of influenced them
one way or another, or makes them think of a
new way. I'm curious if there was a book that
you've read a long time ago or recently that's kind
of been able to make you rethink or make you
(38:17):
just make you think about the overall medtech market or
the SEI market in general.
Speaker 3 (38:24):
Well, I'm a big reader, so that's a big topic
for me.
Speaker 2 (38:29):
You know.
Speaker 3 (38:30):
I used to read business books when I was a kid.
Now I just read fiction. Maybe I get enough business
at work. I can remember, though, one book I read
when I was a kid who was in the eighties
Japan was really on the ascendants and the Japanese companies
really revered an American quality expert named W.
Speaker 2 (38:49):
Edwards Deming.
Speaker 3 (38:51):
And the one thing I took from that he was
of the opinion that if a worker made an error,
it was management's fault because management had not trained the
worker correctly or the process wasn't sufficiently robust. That definitely
stuck with me. If anything ever goes wrong here, the
first thing I look at is like, is what could
(39:13):
I have done differently?
Speaker 2 (39:14):
You know?
Speaker 3 (39:15):
Have I created a culture where people can come to
me with problems and speak the truth? You know, Have
we onboarded and trained people correctly? Have we selected people
the right way? Have we set goals the right way?
Are we measuring the right thing? On one hand, it's
super stressful because I take the blame for everything. On
the other hand, it's not because you know, I'm sort
(39:36):
of have agency for everything. You know, there's like a
path to fix it, and me and the leadership team
we have to look at what we could have done
differently for that problem not to surface. But again, now
nowadays I just read fiction, and what I take from
that normally is, first of all, if there's a phenomenal writer,
it's just an evidence of just the capacity of human
(40:00):
kind to do great things, which is in and of
itself inspiring. But I tend to read biography or historical
fictions or books that just have the arc of time
or the arc of a lifetime where there's something I
can learn from a given character that helps me think
about life differently or inspires me in some ways.
Speaker 2 (40:19):
Because being CEO, there are always ups and downs.
Speaker 3 (40:22):
You know, you only get the tough things on your desk,
the tough decisions to make, and it's helpful to sort
of remove oneself from that and see how others have
confronted life's challenges.
Speaker 1 (40:33):
Interesting. Yeah, and you know the demeans I remember that
from my MBA courses being able to Yeah, that you
be able to You could be able to figure out
the problems and be able to figure out the solutions
from the top down approach if you have the right
data and everything. Yeah, that's great. And so we talk
(40:54):
about you know, lifetime arcs. We'll get to now, how
you do see the next five years playing out for
ARC therapy, for neuromodulation technology for spinal cord injury altogether.
Speaker 3 (41:09):
Well, I would be just delighted if we in the
next five years were able to successfully commercialize and scale
RCX and commercialize and scale ARCIM so that those two
platforms were approved and out there for the benefit of
people with spawnal cord injury and and their loved ones,
(41:29):
and that we make significant progress in defining and progressing
in clinical evaluation of RCBCI. Then I'll be super happy.
Speaker 1 (41:41):
Yeah, well, I look forward to that. And Dave, thank
you for joining us today.
Speaker 2 (41:47):
My pleasure.
Speaker 3 (41:48):
Matt, thanks for shining a light on the work we're
doing and on the work of other interesting companies around
the world. And doing it in long form where there's
a chance to dig in and really explain businesses to
investors and others who are interested.
Speaker 1 (42:01):
And thank you to our listeners for tuning in today
and we hope you join us for future episodes. If
you'd like to stay up to date on our podcast,
you can click the subscribe button on Spotify or your
favorite streaming platform. And for those more interested in Bloomberg Intelligence,
you can click bi Go on your terminal for research
from over five hundred analysts and strategists working across all
(42:21):
major markets. Take care
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Jonathan Palmer
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