All right, let's go ahead and get started. My name is Ross Osborne, the med tech life science tools and diagnostics analyst at Cantor. Today we have NeuroPace, and from the company, we have the CEO, Joel Becker, and the CFO, Rebecca Kuhn. With that being said, would you guys please provide a background on yourselves?
Great. Thanks. Thanks, Ross. Thanks for having us here. So I'm Joel Becker. I have the pleasure to serve as the CEO of NeuroPace. I joined the company a little bit over a year ago, and come from a long background, twenty-five years plus or so, in growing and developing medical device and medical technology businesses.
I'm Rebecca Kuhn, the company's CFO. I've been CFO at NeuroPace since about the time we were founded, so that has been much of my career in med tech, although I was with another med tech startup prior to NeuroPace.
Great. Maybe let's just walk through the history of the company, how the company was founded, and what you guys exactly do.
Yeah, so the NeuroPace, the mission of the company is to transform the lives of patients suffering from debilitating seizures, and so we're focused on patients who have epilepsy and are refractory to medical management with epilepsy. So we have developed and manufacture and distribute the RNS technology. RNS is a responsive neuromodulation system that is used in patients who have failed two or more anti-seizure medications. We're currently indicated for patients with a diagnosis of focal drug-refractory epilepsy and in the adult population. Patients today will receive an implant.
That implant then uniquely is able to monitor, record, and analyze the patient's seizure activity and the brainwave activity associated with that. That allows us to tailor and target therapy that is individualized for what that patient needs. There are about 1.2 million of those drug-resistant epilepsy patients in the United States, and the focal part of the market that we're currently indicated for is about 60% of that population. And we're doing clinical research work to expand the indications for the technology as well.
Great. And then maybe just sticking with the market broadly, with regards to epilepsy, how, or I guess, what other treatment options are there for patients, or what does the treatment paradigm look like, and how do you guys fit in?
It's a great question. So, by definition, the drug-resistant patient population implies that the first line of therapy for someone diagnosed with epilepsy is medication as well as lifestyle management. And so patients go through a process of having a medicine or two or three medicines and then different combinations of those medicines and dosages tried. What we know is that after you fail two anti-seizure medications, the chances of an additional one working for you are about 5%. And so, the drug-refractory population is one that's not going to be responsive adequately to medication management. From medication management, then patients undergo an evaluation to more specifically diagnose their epilepsy and characterize what type of epilepsy and what type of procedure they may be a good candidate for.
Again, they go through a video as well as electrophysiology testing that identifies the underlying clinical condition as well as then the symptoms that go along with that. Depending on what type of epilepsy the patient has, they either go through one of those phases or two of those phases of testing to further refine the diagnosis. Where RNS fits in that is in patients that are drug-refractory and have undergone testing to identify that they have a focal seizure. If they have a focal seizure and are an adult, then they can be indicated for the therapy. An epileptologist generally refers the patient for therapy, and a functional neurosurgeon then performs the implant procedure itself. They work as a team together to identify and manage patients that they're candidates for the therapy.
Great. And then maybe would you walk through how your device actually works?
Starting with the device itself, there's an implantable pulse generator, so that part of the device is implanted in the skull. It is the part that does the actual collecting and recording, as well as the delivery of the therapy. And then there are two leads that are implanted either on the surface of or into the brain itself. And those leads then monitor the epilepsy, the brain activity and sense the starting of epileptic seizures and then allow us to record that information as well as then deliver stimulation to interrupt the start of that seizure.
Great, and then how does RNS differ from the two other med devices on the market?
I'm glad you asked that because I was feeling a little bad. I kind of abrogated my answer to how the device actually works, and I failed to mention that, then what happens is when we're sensing and delivering that therapy, the device is the only one that is able to record, to monitor, record, and analyze the patient's data, and so to your question of what's unique and differentiated about RNS, that ability to monitor, record, and analyze is unique, and what that then means is it gives us an ability to have a, say, a window into the brain activity for individual patients, and then tailor therapy based on what we see happening, and analyze then what's going on with the therapy that's delivered for the patient offline.
So we're able to record all that data. It's uploaded, and our field clinical team, as well as the clinician and their team, can go back and look at the recordings of interest and understand whether we want to adjust, for example, detection settings or therapy delivery. And what that means, again, is the responsive nature of the system allows us to tailor and target the therapy. And where that shows up is in the clinical data, so we have best-in-class seizure reduction data, nine years out in a randomized clinical trial, you know, mid-seventies mean seizure reduction rates for these patients, and similar data in a three-year real-world registry, so best-in-class efficacy data. And then also importantly, adverse event rate data that is much lower than what we see with other neuromodulation technologies in epilepsy patients.
So either DBS or VNS, two other types of neuromodulation that are used in epilepsy patients, we see adverse event rates for things like mood impairment, sleep disturbance, depression, those types of things, in particular with DBS in the mid-teens rate, and we just don't see that with RNS. And we think that, you know, the reason for that is when we're able to sense and deliver therapy only when a patient needs it, and so that allows us to deliver the therapy that's required when it's required, and that results in the higher efficacy rates, and not deliver therapy that the patient doesn't need.
And so the adverse events that we see, for example, with some other technologies, they're referred to as what we call duty cycle technologies, where they're programmed to be on for a certain amount of time and off for a certain amount of time. And so when they're on, they're stimulating whether the patient needs it or not, and the result is hours of stimulation a day for duty cycle therapy versus minutes of stimulation a day, which is what the patient needs with responsive neurostimulation. And we think that ability to target results in both an improvement in reduction of seizures, but as well, not causing some of the adverse events that we see reported with some of the other studies.
Great. Then you mentioned RNS's ability to collect data.
Mm-hmm.
You know, how do you plan to leverage that data?
It's a great question. We're leveraging that data now, and so the way that happens today is, so for patients out there walking around today that are having their brain activity monitored and that data analyzed, it allows clinicians then to tailor and target neurostimulation, as well as things like medication management, caffeine intake, rest and sleep. They can track the patient's lifestyle and medication with what they see then in the recorded brainwave activity, so that's all happening today, and we're doing work to then make the system easier and more efficient to pull out the regions of most interest, and so we record a lot of data, that's good, but we also have to make sure that that data is readily accessible and easy for people to act on.
And so we're doing work from a developmental perspective to allow us to make that more efficient and easy to use. Beyond that, we also see future opportunities to leverage the data further. A couple of things that we've talked about that we're working on there, one is especially as data science develops around us, the AI, ML-type tools that allow us to track and trend not only individual patient data, but the large population of patient data that we have, to look for trends and opportunities to improve therapy. And things that, regardless of how detailed an individual epileptologist may look at the data, we may see things, for example, that we find from looking across hundreds or thousands of patients over weeks and months, that no individual could ever determine from that information.
And so our ability to get insights into the data, as well as then translate that back from the broad population into recommendations for individual patients, we think is a potential area that we're doing developmental work in, one. And then two, we think others may be interested in the data as well. One example of that is we recently announced a collaboration with a biotechnology company that in RNS patients, as they test their compound in a phase IIa trial, we're able to monitor those patients and provide them with biomarker data for how patients are responding to their individual compound. So that's a way, again, that the window into the brain capability can be used to help improve therapy and research improvements in therapy for patients.
Absolutely. Okay, maybe then turning to commercialization-
Mm-hmm.
You know, how has adoption gone so far with regard to your current indication? How are you driving further adoption and utilization within existing accounts?
It's a great question. Adoption is going well. The last number of quarters, we've exceeded expectations, so we're pleased with that, and we continue to focus on execution of our strategy, which we think is really the key to ongoing growth and adoption. Our strategy is all built around increasing access to RNS therapy. So it's three parts, and they all contribute together to increasing access to RNS. One, expanding adoption and utilization inside our current Level 4 Comprehensive Epilepsy Center customer group. I'll say a little bit more about that in a minute, but that's plank one, is expanding adoption and utilization in the customers we have today that have been responsible for the growth we have today and the indications that we have today.
Plank two is expanding our customers beyond the two hundred or so Level 4 Comprehensive Epilepsy Centers we've been focused on. And so in 2023, we received a PMA supplement that allows us to expand from the Level 4 centers outside of Level 4 centers into either Level 3 or community setting centers, where we have the right level of expertise and infrastructure. And so that's the second plank, is expanding access on site of service delivery. And the third plank in the strategy is expanding our indications. So today we're indicated in focal adult patients, and we're doing work to expand those indications. And in particular, we've got a trial that's underway, our NAUTILUS trial, that's underway in the idiopathic generalized epilepsy population.
And so that's really our strategy to drive further adoption and utilization, is to increase access through execution on those three planks. Within the Level 4 population, we're really focused on expanding adoption within each of those centers. So, for example, a Level 4 center may have five or six epileptologists in the center, and there may be one or two or three today that are utilizing RNS as a tool in their treatment toolbox, so expanding the number of people who have adopted RNS therapy inside an individual center. And then once they've adopted RNS, expanding patient identification, so how it is that they choose to use it inside of indicated patients.
For some, they may have a particular sweet spot of a patient that they start with, but then expanding that, and in particular, in some cases, using it as an adjunct to things like resection surgery as well, is a way that we can broaden the utilization. So we're focused on both expanding, broadening adoption utilization within the Level 4 centers, as well as in expanding into the community and expanding indications. And we think that, you know, real programs, you know, that this isn't a strategy on PowerPoint. These are real programs that we have underway, are gonna materially expand both where we can provide access to RNS, as well as the patients that can get access to RNS over the next two and three years.
So we see a lot of adoption and utilization opportunities in front of us.
Yeah, absolutely. Would you walk through Project Care?
Sure, yeah. So Project Care is the name that we use to describe the expansion of the therapy outside of Level 4 centers into Level 3 and into community centers. And what that does for us is it allows us to have patients who only need phase 1 testing, so they don't need to be referred to a Level 4 center for phase 2 testing, either focal or pending successful completion of a clinical trial, potentially expanded indications. The therapy can be delivered outside of a Level 4 center. And so we're in a pilot phase for that right now. We're underway and are in the process of expanding activities-
Mm
around that pilot, but that's plank number, Project Care is plank number two in our strategy to expand site of service.
Great. You know, what's been harder or easier about that, I guess, site of service in terms of rolling it out, you know?
Mm-hmm.
Is it getting patients into those settings, getting those doctors interested?
It's a great question, and we're in the pilot now, so we're learning some of those things.
Yep.
But some of the things that we've learned so far is that, in some ways, it's very much like when we started new Level 4 centers, so there are some very consistent elements. One, having people understand, you know, patient segments and appropriately indicated patient segments. Two, getting them familiar and trained in on the technology. And then three, what role can the technology then play in those patient populations? Those are all things that we're working through with individual centers. It's been interesting to learn. You know, centers are at different points on that continuum.
Some to some, it's brand new. To others, depending on where they trained or with whom they've trained, they're more or less familiar with RNS already, and so it's more a matter of translating the technology into that individual center. But I think some things that we've learned more broadly is that patient-to-patient education and making sure that we have a good understanding of the referral networks are a couple of things that generally we found to be important as we educate and start new centers.
Great. Switching to the future, can you walk through NAUTILUS?
Sure. So NAUTILUS is really the leading part of that plank three in our strategy of expanding indications. So NAUTILUS is the trial name for expanding into the idiopathic generalized epilepsy population. The generalized population broadly is about 40% of drug-refractory epilepsy patients, and there are no FDA-approved medical device neuromodulation therapies for the generalized population in the United States. So it would be the pioneering neuromodulation therapy for the generalized population. So the study is underway there. We've completed enrollment in the study, and as part of our Q2 call here recently, we talked about that we're on track for completing our one-year follow-up in those enrolled patients in Q1 of twenty twenty-five.
So we're excited about the trial. We were encouraged in that we had strong enrollment in the trial. And it's not, for those of us who've been doing trials for a while, it's not so often that things actually move to the left on clinical trial enrollment, and so we were really encouraged to see that, and excited about the potential for the trial and what it can mean for being able to offer an indicated technology for patients here in the U.S. and the generalized population.
Absolutely. Sticking with trials, you know, what else do you have in the pipeline?
So there's other clinical work that we're doing as well. We also have an NIH-funded trial in Lennox-Gastaut syndrome, which is a particularly challenging form of epilepsy, and so we're doing work there, and we're also doing work in the pediatric segment. So again, our strategy is to increase access to RNS, and part of that is indication expansion, and so we're focused on all three of those areas.
Great. And then next, lastly, can you just walk through DIXI Medical?
Sure.
What benefit that provides to you guys?
DIXI, for those of you who may not be familiar, DIXI is a product that we distribute that is a stereo electrode technology that is used when patients go to what I referred to earlier as the phase two part of testing. When they need more advanced diagnostic work, these are electrodes that are implanted that allow for more specific localization of where the seizure takes place. We distribute those products through our RNS sales force, so it's a good leverage point for us. It's been helpful both in terms of, of course, we like to have the products in the bag and the additional products to sell through that group
but it's also been helpful in what I'll call a vertical integration, if you will, of our representatives in the diagnostic process with these patients. So as patients are diagnosed and go through that testing, it's a good opportunity for our folks to be involved, even further upstream and get identification, as well as knowledge of those patients that are coming through and how they may benefit from RNS therapy.
Perfect. Any questions from our audience? All right, if not, I'll leave the floor with you for any closing remarks.
Great. Thank you, so again, we're excited about the opportunities that are in front of us here. We feel like, not only do we have a differentiated and leading technology, we have a clear strategy for how to expand the access to and the impact of that technology. We're excited about and very confident in the results that we've shown so far today as being very much differentiated, and we feel like we're in a strong position, both resource-wise as well as organizationally, to take advantage here over the next one to two to three years
you know, to continue the growth that we've seen and really take advantage of the growth that we see in front of us, to go from really pretty narrow group of customers and patients today to a significantly expanded group, and really, in a lot of ways, provide access to the drug-resistant epilepsy population to RNS therapy. We've got the team to do it, and we look forward to keeping people up to date for our execution on that strategy.
Great. Thank you for being here.
Thank you.