To the Winter 2024 November Investor Summit. The next presenting company is Aclarion, Inc. If you'd like to ask a question during the webcast, you may do so at any point during the presentation by clicking on the Ask Question button on the left of your screen. Type your question into the box and hit Submit. I'd now like to turn the floor over to today's host, Mr. Jeff Thramann, Executive Chairman of Aclarion, Inc. Sir, the floor is yours.
Thank you. Hello everyone. My name's Jeff Thramann. I'm the Executive Chairman of Aclarion. A little about my background: I'm a neurosurgeon turned inventor and serial entrepreneur. I'm a named inventor on somewhere north of 135 different patents on all sorts of things, and I've taken six companies now from zero to exit, with two of those companies being sold to public companies, three to private equity roll-ups, and one to a private company, so I'm going to walk you through the Aclarion story today. Aclarion is a healthcare technology company, and we are leveraging an augmented intelligence algorithm that we've built that uses what we call MR spectroscopy. I'll go into a little bit about what that is to identify biomarkers. These are pain biomarkers within the tissue of the discs of the lumbar spine so that we can identify which discs are painful and which discs are not.
So this next slide is really, this is just our standard disclaimer. It goes over the risks of forward-looking statements that are covered in the deck and the presentation. So the problem that we're trying to solve is that when a patient comes in to talk to a surgeon about their low back pain and about potential surgical options, and this really carries over to all physicians, but I'm going to focus on the surgeons here in most of this presentation, but when they come in, one of the things that a lot of folks don't understand is that pain is not actually visible on an imaging study. You can't see pain unless it's a fracture or a big tumor or something very obvious.
But when you're talking about just degenerative changes of the spine, which is a common source of pain, it's not possible on standard images to understand the difference between what's normal anatomy and a normal degenerative process and what's painful. That's a physiological process that can't be seen on imaging. So that results in a bit of difficulty in trying to diagnose what the surgery is that you're going to do on a patient because you're guessing essentially as what's causing the pain. As a result, the results of spine surgery for pain by itself without neurological symptoms is not that great. And there needs to be a solution to really drill in on what is the problem. So that's really what we're addressing with our technology.
What we do is we essentially look at, through this MR spectroscopy technology, we look at the chemical makeup of the lumbar discs, which are a big source of the pain. And then we put them in our augmented intelligence algorithm as we measure them through our technology. And we give a surgeon a report that says, "These are the discs that we believe are painful as a result of the biomarker analysis that we did." So then you take this kind of unclear situation, you provide significant clarity to it, and now you can have more of a personalized medicine approach to low back pain surgical interventions. So to prove the effectiveness of the technology, we ran a study with Dr. Matt Gornet at St. Louis. This study was published in the European Spine Journal in 2009. It was published again in 2023 after a two-year follow-up.
And essentially what we did in this study is we took 73 patients who went on to surgery. And all of these patients had one of our Nociscan scans done. That's the name of—that's what we name the technology. It's called Nociscan. So everybody had a Nociscan done. But Dr. Gornet was blinded to those results, so he didn't see them. And then he just did the surgery, calculated what surgery he was going to do the way he normally does. After the surgery was completed, we broke the groups up into two groups. In one group, we looked at what was the outcome of the patients where the surgery that was performed matched up with what our Nociscan technology said were the painful discs. And in that group, at one-year follow-up, 97% of those patients had reached the criteria for significant clinical improvement.
In the other group, there was a mismatch. And in that group, it was only 54% hit that criteria. At two years, the results were durable to 85% and 63% that you see here. Now, these are very significant results because they save the healthcare system a lot of money because you're getting better results on the first surgery instead of doing multiple surgeries after surgery for the people that don't do well the first time. So we then did a study to look at what are the savings, what are the economic implications of this. And we were able to demonstrate that we save about $1,700 per patient. And this is inclusive of the extra cost of our technology. Outcomes are 10% better across the board, and there's significant savings to the healthcare dollars.
The results of this publication were presented at multiple international spine meetings over the past year. So the next step we're taking from a clinical perspective is we're entering into a large 300-patient prospective randomized study. So with this patient, we're going to take 300 patients total. It's going to be split up between 150 patients that have the Nociscan technology done and 150 patients that do not. And we're going to simply look at the results to see who does better. The guy who's running this study is Dr. Nicholas Theodore. He's the head of spine surgery over at Johns Hopkins. And we're just getting this study underway with enrollment of the clinical sites right now. We expect to have early results in 2026. Because of the uniqueness of our technology, we were also picked up by a couple of studies from the National Institutes of Health.
Everybody's heard of the opioid addiction epidemic that's going on, and the NIH was given $150 million to create a strategy to address opioid addiction. Since chronic low back pain is the number one cause of opioid addiction, they focused on this, and they're going through a number of studies. We've been involved in all of them, about 500 patients total across the two studies, BACPAC and BEST, and they're looking for diagnostics that have the potential to better triage the patients as they first come in, so this is a significant thing for our company because primarily we're focused on surgical decisioning at this time.
But ultimately, we hope to move up in the treatment paradigm such that when the patient first comes in for their first MRI with low back pain, they can also get an MRI, they can also get an MR spectroscopy study done so we can see which discs are painful and then put them down a more efficacious treatment pathway. In addition to moving up the pathway for triaging patients as to where the best path is to go, we've also been involved in some studies where, again, we get paid. Like the NIH studies, we were paid for all of those. And in this active study that I'm going over now, this is another study where we were paid to come in and evaluate the biomarkers within these discs.
This study is designed to try to treat the discs with biologics and see if the disc can improve over time. These are stem cell therapies designed to regenerate the disc, but you need some type of measurement to understand what's happening to see if you're improving the disc and see if that correlates with outcomes. This study has now been completed. It was a total of 204 scans, and we're waiting for that data to see if we effectively correlated with the improvement in the clinical outcomes as these discs were treated. A little more about the technology itself at this point. What an MR spectroscopy study is everybody's familiar with going to an MRI and getting an imaging study. Well, an MR spectroscopy is just another sequence.
You're having your MRI, you're in the same MRI, and when you're having your regular MRI done, a lot of people don't know this, but you're getting a T1 sequence, a T2 sequence, a Fat Sat. There's a whole bunch of them. What we do is we just add a spectroscopy sequence, which adds about five minutes per disc level that we do. And then that raw data comes directly from the MRI, and it goes to our cloud where we have proprietary signal processing software that then processes that raw data to break it down into these specific biomarkers. And that's what you're seeing with these little spikes here on this graph. Each one of those spikes is a different biomarker in the area under the curve that quantifies it.
We take those numbers and we put them into our augmented intelligence algorithm, and then it tells us whether that disc is consistent with a painful disc or not. And you can see on this slide here that there's really good separation between the two as you put this into our ratios. So the only competition that's really out there to understand if a disc is painful or not is an invasive procedure that's called a discogram. So this is a separate procedure. It's very painful for the patient because they can't go to sleep. They have to be awake. And the surgeon is going to—or the physician is going to insert a needle into each disc, pressurize it, and be talking to the patient at the time they're pressurizing the disc to ask if that's consistent with the pain they have when they're having significant back pain.
As you can imagine, not a pleasant study. But because of that, it's also very subjective. So the results aren't as reliable as one would hope. And it's also twice as expensive as our technology, which is non-invasive. And with any invasive procedure, there's some complications. And perhaps the biggest one that's showing up after 15-20 years of doing this procedure, we're starting to see that just the act of sticking a needle into the disc increases the risk that that disc, even a normal one, is going to break down over time. So there's some studies showing that that risk is as high as 50% of those normal discs requiring surgical intervention at some time in the future. Because of this, discogram is falling out of favor.
So our main competitor in the market is kind of falling away while we're coming in with a cheaper non-invasive that I would argue adds better objective data because we're actually measuring these biomarkers. Everything we do is covered by significant intellectual property that covers the proprietary biomarkers and the ratios that we have. It covers the post-processing technologies we use to identify the biomarker spikes and to measure them. We also have AI that we're able to correlate to. We also have patents on using AI to correlate the raw spectra to clinical outcomes and the use of internal tissues as controls.
That last one really makes it a platform technology, which allows us to use this MR spectroscopy potentially in the future to not only look at breast cancer and prostate cancer, but we also have some recent patents that were issued covering evaluating infection of the disc that can potentially be treated with antibiotics instead of surgical intervention, which frequently happens today. Where we are with the product right now, it's a surgical decisioning tool, and we're trying to move that forward in the future to be more of a population management and triage tool. That's what some of those NIH studies we're looking at with our technology. All regulatory approvals are in place both here in the U.S. and overseas.
The market opportunity, we're starting really with the lumbar fusion market and then expanding into all surgical procedures and then into that population management that I was talking about, which is about $135 billion a year. It's actually the highest-cost diagnosis in the United States. You can see in the U.S., you have about 16 million people with significant low back pain and degenerative disc disease. You can see worldwide, it's a huge, huge problem.
We're not the first ones going down the path of trying to create the codes for augmented intelligence algorithms. There's been a lot done in this space on the cardiology side. You can see I have three companies listed here: HeartFlow, Cleerly, and Elucid. All of these have had significant valuations while they marched down the path of becoming standard of care. Interestingly, all three of those are fighting over the same market share, whereas we have a bigger market and we're the only ones out there with a significant patent portfolio. And when you take these products to market, you get these CPT Category III codes from the AMA.
This allows you to bill for the procedure, but it doesn't associate a payment to the procedure. So you can bill it, but most of the insurance companies are going to reject it. So the challenge here is how do you move from these Category III codes to Category I codes? And the way you do that is you partner with surgeons and you try to get them to adopt the technology even though they might not get paid. And then you work with them to work with the payers to try to get payment.
So this is really the core of what we do on a day-to-day basis is trying to drive this through the Category I codes because when you do reach those Category I codes , that's where that process of driving to that and increasing scan volume and getting coverage decisions, these are the catalysts that really drive value in the company. And the previous augmented intelligence algorithm companies in the cardiology space, once they get to the point of having those Category I codes , they've been able to attain valuations north of $1 billion. So the way you do that is you establish the technology as a standard of care through a stepwise pyramid, but you're really looking to work with your surgeons. You secure a local payer coverage decision. So this is a coverage decision from an insurance company in a local market.
Once you get that, you then can really start adding in more surgeons, getting more volume in that marketplace. The insurance companies see this, then you expand to the other insurance companies and ultimately add marketing support behind this, so you get these little wins all over the country, and we're working on that with our surgeons, and then ultimately, as you build up more and more of those, then you get a bigger win when you're able to get a national coverage decision, so these payer coverage decisions are really the key catalysts that we're aiming for, and it starts with your KOLs, your key opinion leader surgeons who use it, then they start doing their own evidence studies. They're presenting data to the payers showing that this is better for the patients, and then you get that local decision, and then you move on from there.
Some of the key catalysts I tell investors to look for are MRI activations from our KOLs, increased scan volumes, and then ultimately, it's really these payer coverage decisions that you're going after. We just recently had our first big win on the payer coverage side. This happened out in the U.K. It followed the exact path I just went over. We had some key opinion leader surgeons out there who adopted our technology. They were previously using discogram. They compared the two. They determined that our technology was superior. They themselves took their data out to the payers, secured payer coverage decisions, and we're now covered by three of the top four private insurers in the U.K. We're working with them to expand that coverage and ultimately to get coverage from the universal coverage that they have out there in the U.K.
But this is really the model that we're trying to utilize in the U.S. to drive to these coverage decisions. And we have a phenomenal group of key opinion leaders. These are the 10 folks that are in the U.S. that are going after us. After this, you'll see some major institutions here such as University of California, San Francisco, top orthopedic residency, one of the top orthopedic residencies in the country. We have folks from the Barrow Neurological Institute, which is a top neurosurgical residency in the country. We have guys who are the president of the spine section for the American Association of Neurological Surgeons. We got Cornell, Northwestern, Advocate Aurora, which is one of the biggest private health systems in the country.
A lot of big-name folks are getting behind this and pushing it forward, and that will eventually break through and get these coverage decisions that we need. As far as the management team, I gave you a little bit about my background, but Brent Ness is our CEO. Brent and I worked together in a previous company that I brought him in to run as our president. He did a great job there. He went off and he actually worked for HeartFlow and for Cleerly in this space. I pulled Brent over, telling him about this opportunity in the spine space. He jumped at it. So he's been our CEO. He brought John Lubisich over. They worked together at Medtronic, and John's been a divisional CFO for Medtronic for a number of years. And then Ryan's been with the company the longest.
He's the Chief Strategy Officer, instrumental in getting our Category III CPT codes and working closely with the surgeons and the KOLs to drive the coverage. We have a full independent board. I'm not going to get into all the details there, but just to note that there is full independence. We have a very advanced advisory board, particularly Jeff Lotz, who's on the scientific side. Jeff is essentially the founder of the company. It's his lab. He's world-renowned in back pain and identifying biomarkers for back pain. He's over at UCSF, deputy editor for spine, and just a real leader in this space. We're lucky to have him. Just a financial overview. With our last filing, we had $1.3 million of cash, and we burned about $1.6 million per quarter. So we're obviously in the market of looking for capital.
So some of the key highlights, we're addressing the highest expenditure diagnosis in the U.S. at $134.5 billion. We're coming at it with a first non-invasive diagnostic with strong clinical evidence of efficacy. And we're doing that at a time when the competitive product is falling out of favor. We're covered by a broad patent portfolio. We have our CPT codes and our regulatory path cleared, which gives us a gateway to commercialization both in the U.S. and overseas. Strong value proposition for everybody within the ecosystem. And there's an established path for success to these AI algorithms. We're not the first ones bringing it to the AMA or to the payers. And we have a successful management team that's really been in this space for a long period of time with a long history of success. So that concludes the presentation.
I'm now going to address any of the questions that are in the Q&A tab. So it looks like we have no questions. So with that, that ends the presentation.
Thank you. This concludes the Aclarion, Inc. presentation. You may now disconnect and please consult the conference agenda for the next presenting company.