NeuroMetrix is a medical device company focused on the diagnosis and treatment of the neurological complications of diabetes. The company currently markets products for the detection, diagnosis, and monitoring of diabetic neuropathies such as diabetic peripheral neuropathy and median neuropathy (carpal tunnel syndrome).
Below, President and CEO, Dr. Shai Gozani is interviewed by OneMedRadio where he discusses the Sensus Pain Therapy device.
Click below to hear full audio interview and see transcript that follows.
Matthew Margolis: Greetings from OneMedRadio, I’m Matt Margolis. Today, we welcome Dr. Shai Gozani, President and CEO of NeuroMetrix, a Massachusetts-based neurotechnology company trading on the NASDAQ under the symbol NURO. Thank you for joining us, Dr. Gozani.
Dr. Shai Gozani: Thank you. I appreciate the opportunity.
MM: So let’s start with the biggest recent company news, the FDA filing of pre-market notification for your Sensus pain therapy device. So firstly, what is the technology here? How does it fit into NeuroMetrix’ technology profile?
SG: Well thank you for the question. We’re very excited by Sensus. So Sensus is a transcutaneous electrical nerve stimulator, that’s often abbreviated as TENS. This is a technology that’s been around for some period of time, probably about 20, 25 years and it’s been shown to be effective in a variety of different pain syndromes. Recently, the American Academy of Neurology suggested that it should be looked at more aggressively in terms of treating what’s called painful diabetic neuropathy, which is the pain associated with diabetic nerve damage which is our area of focus.
So what it is, is a noninvasive nerve stimulator that would typically be based around the calf and what it does is it stimulates normal nerves and by doing that, you actually block aberrant pain signals that are coming from the vicinity of the foot and ankle, which are the source of the pain in painful diabetic neuropathy. So it’s essentially a pain blocking technology. It is non-narcotic, it’s not addictive and it basically provides on-demand analgesia or pain relief.
It fits very nicely into our technology platform as well as market strategy because it is a nerve stimulation technology, which is our area of expertise going all the way back to when we started the company in 1996. It’s also an extension of our diabetic neuropathy strategy or diabetic nerve damage strategy where we started. Our first product in this arena was a diabetic neuropathy diagnostic test. This allows us to expand into a therapeutic option once you identify the diabetic nerve damage. So it fits very nicely from both a technology and a market perspective.
MM: And what is DPN, how is the affliction affect the population?
SG: It’s a great question. So DPN is the acronym for diabetic peripheral neuropathy and simply stated, that is the nerve damage that is caused by diabetes. It is the most common chronic complication of diabetes and it affects about 50% of all people with diabetes. So just to put some numbers on that, that’s over 10 million people in the US and over 150 million worldwide so it’s a huge problem.
What DPN does and the complications of DPN are multifold. First of all, it is the leading or the primary trigger for patients developing foot ulcers, which ultimately can lead to amputation, and DPN as a trigger for amputation is the leading cause of amputation in the United States. It can also lead to severe pain as I mentioned before and that’s where Sensus comes in to help treat that pain and also particularly in the elderly it dramatically increases the risk of falling which of course can lead to hip fractures and other problems.
So it is a major, major issue. It accounts for about 25% of all direct spending related to diabetes. It is a complication of diabetes that has actually been somewhat ignored because there are inadequate diagnostic and therapeutic options. So it’s a big opportunity to really make a significant impact both in patient care, quality of life, and also in overall economics.
MM: So in that way, what makes the NeuroMetrix pipeline intriguing? What makes your technology unique?
SG: Well we are the only medical device company that is focused on DPN, the nerve complications of diabetes. So while there are many very, very exciting and interesting diabetes medical device companies, they tend to be focused on the glucose measurement and insulin management part of the equation, which tends to be more of a type 1 diabetes focused application. Then there are pharmaceutical and biotechnology companies that are trying to develop obviously pharmacological type approaches to treating either DPN or the manifestations of DPN which is pain. But there’s no medical device company that’s trying to provide device related solutions for DPN. So that’s an area that we have a unique focus on and I think if we can build that out it would represent a very unique diabetes franchise.
So we already have one product on the market, which is a rapid point to care test for DPN and that product is called NC-stat DPN check, which is an evolution of our longstanding nerve diagnostic technology. We launched that product in the fourth quarter of 2011 so we have about two quarters of commercial experience behind us. Sensus as we’ve discussed will be our second product in our DPN portfolio and that will hopefully pending FDA timelines, we’ll launch later this year so that we have a diagnostic and a therapeutic in DPN.
Then we have a number of other earlier stage programs both in the diagnostic side as well as in the therapeutic side for various aspects of DPN, which we would look to launch in subsequent years. So again, we have a unique footprint in this space because as a device company, we’re the only ones trying to attack this huge clinical and market opportunity and again with tremendous unmet needs.
MM: I want to circle back to that NC-stat DPN check that you had mentioned earlier, so what has the market adaption of that diagnostic device been? What’s your initial target market?
SG: Yes. So we have a number of different channels that we’re pursuing for that product. So just to restate it so as I said DPN check is a very rapid, very cost effective way to test for DPN . Just to frame it, the traditional approach to assessing DPN is basically the clinical examination, which is very important but it does not have high accuracy. It can only detect DPN at a very late stage when there is really very little you can do to affect the progression of the disease. The nerve is basically largely damaged or almost completely deteriorated at that point. So clearly we want to detect it at a much earlier stage and even to be able to follow its progression and that’s what DPN check does in the physician office in a very rapid cost effective way.
The channels that we’re targeting are as follows. We started out and extended the focus on the endocrinology, the US endocrinology and podiatry markets. Endocrinologists and podiatrists are two clinical groups that tend to focus obviously on diabetes, but also in particular on the complications of diabetes. In the case of the podiatry, it’s very much on neuropathy and foot issues. So they’re kind of the top of the adaption pyramid. So that we have a direct sales force that sells into that group and we sold over a hundred devices in the first quarter of sales, which is the first quarter of 2011 and then as we reported recently, about 130 or so this past quarter. So we’re getting pretty nice adaption in that initial group which is about 15,000 clinicians in the US, but that’s just a relatively small kind of leading adapter type of group.
The really big opportunities for this product are in the US primary care 85% of diabetes is managed and that’s a market we’d have to go after with third-party distribution. So we’re working on that. We haven’t signed large distributor yet, but that’s something we’re targeting for later this year or early 2013. Then two very interesting markets are retail medicine, which is comprised of pharmacies and often associated with those pharmacies you have medical clinics. So these are for example the CVS, Walgreens and Wal-Mart type pharmacies and then increasingly you’re seeing medical clinics associated with that such as the Take Care Clinics from Walgreens and the mini clinics from CVS.
That retail health sector is looking more and more at diabetes and looking to provide various kinds of services around diabetes such as early detection of diabetes and its complications so it’s a fairly natural potential target for us for our test. In fact, we recently announced that Wal-Mart in Canada, their Canadian subsidiary is going to be deploying NC-stat DPN check in about 100 of their pharmacies that have a diabetes focus so that’s very exciting.
Another market for us is managed care and particularly capitated managed care because they’re so prevention oriented and obviously to manage costs. So we’re working aggressively on managed care. Then the final sector is international markets and there’s a lot more diabetes outside the US than inside the US so clearly one has to look at diabetes in a very international perspective. We’re looking at specific market opportunities such as in India, Europe, the far east as potential growth opportunities as well.
MM: I do want to touch on that Wal-Mart Canada agreement. I have serious interest in that and I think our readers and listeners will be very interested to learn a little bit more about that company milestone. You know, what was the discussion process like, where do you go from here?
SG: Well it’s very intriguing and really a credit to Wal-Mart and their forward looking perspective on helping the communities in which they have pharmacies help in managing the diabetes problem. So in Canada, they’re a little bit more advanced in their preventative programs at this point even than in the US. What they’re looking to do it appears is to provide services to the community to basically offload from primary care. So they really look at the pharmacist and the pharmacy as a way to provide a variety of services to detect diseases at early stage and provide kind of entry level healthcare such that primary care physicians could focus in on sort of more involved issues and prescriptions and treatment and so forth.
So they look at neuropathy and its complications related to foot problems as a very important area that they can intervene in. What they want to do is provide early detection so that basically a consumer walks in to a Wal-Mart in Canada and they can get this test. If it’s abnormal, they can go to their primary care physician and that primary care physician now that they’re alerted to the issue can really focus in on it and hopefully prevent the progression of the disease. So it’s a fantastic prevention model and again a credit to Wal-Mart in their forward looking approach.
We obviously would like to see if that model cannot be expanded further in Canada as well as in the United States. There are differences in the US sort of retail health market versus a Canadian one but nevertheless we think there’s opportunities to build up that market in early stage discussions with a variety of retail health companies about looking at whether we can find opportunities to deploy the technology in a similar fashion.
MM: Of course. It’s very interesting. So lastly, as we wrap up this interview, I want to circle back to the idea of the surge in personalized medicine. As a guru, as an insider in this sector, I was wondering if you could just speak on this recent surge and how it’s affecting your business model.
SG: Well it’s a critical question and I think more and more of healthcare will focus in on personalized medicine because frankly it’s just a much more efficient form of medicine. Just to frame it within diabetes and our products, particularly DPN check, something recently happened that’s relevant here.
So for many years, the recommendations on managing diabetes were to target a particular level of what’s called glycosylated hemoglobin or A1C and sort of it’s the target metric for managing diabetes and the ADA recommended a particular level of 7%. So physicians basically try to manage everybody to the 7% level using the variety of different treatment options they had and that maybe insulin and other medications and so forth.
Well recently, it’s come to light that that’s not a very good approach and in fact everybody has a different target, i.e., it needs to be personalized. So in fact, the ADA and its European counterpart just came out literally in the last few weeks with a new statement on managing diabetes where they say there’s no target. There’s no specific target for individual patient, but in fact the target has to be personalized to the needs of that patient. So one might ask well how do you personalize it for that patient and the answer is you have to look at what the diabetes is doing to that patient in terms of how it’s damaging their various organ systems such as the nerves.
So a product like NC-stat DPN check fits very well into this concept of personalized diabetes care. Because if you have a patient and they have let’s say 8% where in the past you would treat them down to 7% with its attendant cost and risks, if that patient is not showing any complications of being at 8% ,you can keep them there. By the same token, if you have a patient who’s at 6.5% and you feel great about them in the past then you test and you find out that in fact despite the fact that they are below the supposed target, they’re developing nerve damage, you clearly have to be more aggressive. Again, you have to personalize diabetes care to the actual impact of the disease on that patient. So you need tools to give you the information to do that. So I think personalized diabetes care as sort of a subsector of overall personalized medicine is going to become a much more prominent aspect of diabetes disease management.
MM: That was a company snapshot with Dr. Shai Gozani of NeuroMetrix trading on the NASDAQ under the symbol NURO. This is Matt Margolis signing off.