Okay, good afternoon, everyone. For those of you that are just joining us, welcome to Maxim's Fifth Annual Healthcare Conference. This is our fifth virtual conference, fifth annual virtual conference. It's a three-day conference. Today is day one. It spans through this Thursday, October 17th. We have over 85 companies presenting. The vast majority of the time, it's the CEO of that company. Sometimes we have CFOs or other executives. With us today, we have Jennifer Ernst. Jennifer is the CEO of Tivic Health Systems, symbol is T-I-V-C. And with that, I'm gonna turn it over to Jennifer for about a five or six-minute introduction and company overview, and then we'll open it up to questions for 20 minutes or so.
Okay.
So with that, Jennifer?
Thank you, Anthony, so I'll go ahead and go through a few slides just to set up the company. I will let everybody know that the slides I'm showing are available on our website, so what I'll be doing is just a fairly brief overview, and I realize I can't actually do a slide share. I'm sorry. I thought-
That's okay
... I thought you were allowing me to do that.
Yeah.
Tivic is in an area called bioelectronic medicine. This is a field where we use the electrical signals that are carried along the nerve fibers to create beneficial or therapeutic effects, much like pharmaceuticals. If you think of pharmaceuticals, trillion-dollar industry that we've built using the chemistry of the body. The electrical part of the body, though, has been largely under-leveraged. This is an area where there is growing interest to basically create, again, a new field in medicine that is emerging, that could, by some reports, become the next pillar, beyond genomics, beyond proteomics, but actually studying and using these electrical signals of the body. Tivic today is, well, as you said, we're publicly listed. We have two platforms actually in our arsenal.
The first bioelectronic device we have is a small handheld unit. It's a small device that's used for the treatment of sinus pain, pressure, and congestion. That device is in market, FDA-approved. We're available now through our website, Amazon, Walmart, McKesson, Cencora, Cardinal Health, for professional distribution, so in market, selling, you can take a look at our website, see the kind of reviews we get for treatment of sinus pain, pressure, and congestion. But Anthony, I think mostly what we're going to be talking about today probably is the newer area. The second platform that the company has been developing is an area in vagus nerve stimulation, so our first product treats the facial nerve area.
The second product we have in development, or the second suite of products we have in development, treat around the neck area, a very, very important nerve in our biological structure. The vagus nerve regulates the autonomic nervous system. It is a key part of regulating heart rate, brain function, autoimmune functions. It plays a critical role in a number of diseases, and so for that reason, it's considered a very high-value target. But to date, the devices that are targeted are mostly implanted, so things that go inside the neck. So things where you actually have to slice open the neck, put something like a pacemaker in, and run wires up.
What we and a handful of other companies have developed are non-invasive approaches to get the similar effects, and actually, with recent clinical data that we have published, we're showing some of the strongest biological effects in the non-invasive techniques. In fact, some of the strongest effects on neural activity, on cardiac function, and on autonomic function of any non-invasive device, and actually as strong or stronger than most of the implanted devices. So very exciting time for the company as we have begun developing this new platform a couple of years ago, publishing our first clinical data. We are completing work with the Feinstein Institute, and in the process of creating the commercial roadmap for that area of vagus nerve stimulation. So net, macro view of the company, we're doing about $1 million in revenue right now on the initial product.
That is a $9.1 billion market opportunity around the treatment of sinus conditions and issues. And we are developing a second platform that has very strong medical use cases that could include areas like cardiovascular disease, neurologic functions, stroke rehabilitation, depression-type applications. And so with that, very exciting time for the company as we begin to move through the first proof of concept, and by next year, should be able to enter our phase II trials with the vagus nerve stimulation program.
Okay, perfect. That was right on time, so appreciate that, Jennifer. Maybe, as you said, there are a number of companies that are looking at vagus nerve stimulation and doing so non-invasively, as you are doing. And you said you're seeing some very good early results. Maybe talk about the... If you could, not just the mechanism of action, but the actual stimulation that you're using. What exactly bioelectric signal are you sending? Is it certain milliamps? Is it a certain-
You're asking for the secret sauce. All of those are subjects of patents pending, but-
Okay
... what I can give you is a little bit more detail-
Yeah, whatever you can.
... around the what we expect to be the function. If we are using a cervical, what's considered they call it cervical nerve stimulation, which means we're going at the vagus nerve in the neck area, a bilateral stimulation. Think of this like something like a lightweight device that could be worn around the neck. The exact placements of the electrodes may vary depending on which of the disease states that we're talking about. So asthma, the amplitudes, or these very specific protocols, and in fact, I'd like to digress just briefly to talk about why the concept of a bioelectronic platform is such a powerful concept. When we talk about molecules, when our molecule is like a pharmaceutical, it's a fixed unit.
It is something that once you have produced it, it has to bind to certain receptors in the body, and once you have set the dosing, the dosing is what the dose is. It's whatever you distribute, whatever gets prescribed. There's no concept of my pill changes. It could change its dosing as a disease state resolves. Devices are quite different. So when I talk about a bioelectronic platform, we can change the waveforms, the parameters, the amplitudes, the frequencies. We can change different parameters in the device to address different disease and conditions. So if we want a stronger effect in the cardiac area, we may do more or longer stimulation of the effects that, of the type, that will give that treatment area. Will get us into-
Right
... more of the cardiac effects.
Sure.
Also, and again, I said I think it's such an exciting field in bioelectronic medicine: is this adaptability. So what a device can do that a drug can never do is change its programming. So we can take signals from the body, actually be reading back and allowing a physician to tune that treatment, or eventually, in real time, tune the treatment in response to the patient's response to the parameters. So to go back to your original question, we're looking at the cervical area of stimulation for the vagus nerve. Not sharing all of the secret sauce yet, probably won't for some time until patents are actually out there and published. But the key being that we can tune those parameters, and that is actually the work we're doing with the Feinstein Institute right now.
The Feinstein Institute at Northwell Health is one of the world leaders in bioelectronic medicine and is currently working with us on that optimization work.
No, that's great. That's great. And as you said, there's a lot of... The Vagus nerve controls a lot of different functions within the body, so there's lots of potential indications. What do you see as the first, or what do you believe will be the first indication you'll be targeting? Have you made a decision on that at this point, and if so, what do you think the-
Yeah
... as best you can estimate the timeline would be?
I'll say, watch this, watch this space closely in the coming weeks. This is actually an area we have material information coming out of work-
Right
... that we're doing with a strategic growth consultancy named Fletcher Spaght. So I've actually, we've published that we are doing that work with them. They started by looking at 32 applications, identified 10 particularly strong candidates. We're whittling that down right now to two to three. And I expect to be able to communicate more on that, so certainly if people are interested in this area. I'll also mention that I will be out for the Maxim team and for the others that may be interested. There's a conference coming up in New York called BioFuture, and this area, bioelectronic medicine, is one of the linchpins of the conference. So that's coming up end of the month. I'll be out in New York for that.
Right.
I certainly expect, I hope that by that time I'll be able to share more specifics. I will mention, you know, some of the obvious areas. One of the areas I think is really interesting, and not to say this is where we're going yet, but one that I think is really interesting. There's a company that has recently been approved for stroke rehabilitation. But they require an implant. So you can imagine a stroke patient who doesn't recover. Six months later, you're putting them back into a surgical situation or to do an implant, and rated for six weeks of treatment. This is the kind of application that would be perfect for a non-invasive device, and hopefully be able to get at that patient much earlier in the cycle.
Right.
When you get into that stroke rehabilitation, restoration of function, rehabilitation type marketplaces, just as an example of why this is so powerful, you know, we look at something like LivaNova that has treatments, again, that require implants for epilepsy, for depression. Still a multibillion-dollar market cap company, but even their ability to penetrate that market is limited by the fact that it is a surgical implant that has to not only be paid for but has to be proven out for safety and the profile of the surgery. Those are very, very high bars compared to a non-invasive approach.
Agreed. Agreed, and then, you know, if your early data is showing that you're able to get similar results, if not better results, non-invasively, then it's an easy decision, right? 'Cause there's always risks with any surgery.
Yeah
... there's infection risks, there's, well, obviously, the cost-
Yep
... potential adverse effects. But, so, you know, if you're able to get similar results or even better, but if you're able to do that non-invasively, then that's a huge advantage that your technology could have. You know, vagus nerve stimulation is, like I said, being explored by a number of companies, some of them which, you know, you and I have discussed in the past.
Mm-hmm.
You're working with the Feinstein Institute. Do you believe that the technology that you have differs significantly from what's out there, or is it the methodology by which you... 'Cause you're talking about different amplitudes, different frequencies. Is it that research that gives you the better results, or is it something different with the actual technology itself that you think is what's compelling or, you know, proprietary?
It's a really good question. If I open up our current commercial product, it looks like every other electronic device. It's got a microcontroller. It's got resistors, capacitors. There's nothing magic about the hardware, and it's in the programming that really is the design. In the case of the commercial product today, and of the VNS as well, it's the very specific frequencies, it's the shape of the waveform, it's the amplitude of the waveform, and the experimentation and techniques that led us there. That is why we started with a very simple product.
I mean, it was an idea that, one of the people involved with the company had this device he developed with a doctor, showing really good results, and we took it through clinicals, we took it through Stanford University, we took it through the FDA process, we took it through the CE Mark process. So we really validated the heck out of the application in the sinus case. That, excuse me, but we had something to build on. So with the VNS work, that's why this optimization phase we're doing right now is so important. I'm afraid that when I look at the marketplace, you know, historically, pacemakers evolved because you threw a lot of current at a muscle. And when you do that from outside the body, you have something like TENS and like physical rehab.
When you do it against the heart, you have a pacemaker. But you're throwing a lot of current at the nerves that trigger the muscle. We have evolved a long ways from the days when the pacemaker was evolved, was introduced. But even things like the spinal stim implants, where you throw a lot of current at a nerve fiber, and you can override the pain signals. We're now to a phase, and this is why Feinstein is such an exciting collaborator for us, the kind of work they've done and the work that we're tuning right now is in that much more precise, much more precision, which frequencies fire, which nerve circuit, which neural circuits, which areas of electrode and stimulation and amplitudes and waveforms combine to activate the nerves and can activate the centers that we wanna get after.
So the technology itself, good. The really great part, my last company, we actually were building the entire infrastructure and manufacturing. I am so happy that there is a multibillion-dollar electronics industry we can rely on for manufacturing. So that part, it is, as long as it's in an FDA or appropriately regulated site for quality control, you can manufacture, we can manufacture devices virtually anywhere.
Yep.
It's really that secret sauce that's in the programming and the tuning that makes all the difference, and that is why you can differentiate in the intellectual property, why we can differentiate in our IP sets, across different applications, different structures, different applications, and different verticals. So I'm often asked, you know, if I'm gonna make one broad comment. There's the implantable devices which, because they are surgical, always have this regulatory component where they have to prove efficacy. There's also a bunch of devices that have been popping up lately that are unregulated. They market as wellness devices. They market for stress in the U.S. for stress, overseas you can also market for pain. But they haven't necessarily done anything to optimize for those applications.
In fact, an insider at one company said they basically made their waveforms by what looked pretty on the screen. So this is an area that there've even been petitions filed with the FDA to start clamping down on that area, because vagus nerve can be such a powerful, powerful effect on the body. Being able then to take and have these regulated, this third class of device that is medically tested, tested for specific indications, and designed for that optimization, I think we're approaching this a little, you know, very systematically, maybe more rigorously because the science has been able to be advancing in the last 15 years, 20 years, from some of the companies that came before us. And yet we get to benefit from the fact that those companies have also built up reimbursement pathways. Those companies-
Sure
... have built all of the, you know, channels to market. So there's a lot of opportunity now in this space where the doors have been opened by, and a time when maybe having been the first in the market would've been a little difficult. But being in the wave and having some very differentiated results, medical results, I think is a very strong position.
The potential indications, right, are pretty broad, right? I mean, there's markets that maybe if this works, and you hone this technology, it's PTSD, it's anxiety, it's, you know, potentially, depression-
Mm-hmm
... headache. I mean, there's there it, you know, the list goes on. Do you see that as all those indications as possibilities for Tivic down the road?
I would say probably about half will end up being. I won't claim that we're gonna blanket the world. I am careful about each of these requires a clinical market. It requires an entry point, so there are what we're looking at, really, though, is where there are adjacencies, so you mentioned, for example, a number of mental health issues, mental health-related. A portfolio around mental health would make a lot of sense. Similarly, a portfolio around neurologic disease because we're at the similar call point. Similar, a cardiac disease portfolio.
So, the way I actually can envision this going forward is there will be one or two areas that we pick to work on, through our own investments, through grant programs, through the type of funding that can be available for medical research, and then look to partner with companies that have strong go-to-market presence in some of the areas that we can target. And if I look, for example, at heart rate variability, we've shown a 2x increase in the significant measure of heart rate variability with one treatment, right? 2x . In our high responders, 2.7 . That's the kind of change you get with a year of changing your diet, your exercise, meditating for a year, and reducing your stress load, right? This is. These are huge changes that we're eliciting in very short periods of time.
Similarly with brainwaves, we have seen changes in the theta, in the gamma waves, 66% change in some of the neural functions. I mean, these are large numbers moving in response to the stimulation. So again, there's a lot of untapped opportunity here. I do see partnering as we go forward as one of the strategies for being able to leverage more of what is possible with the technology we're developing and the IP that we've been filing.
Yeah, sounds all very promising, and, obviously, we know these markets are large markets. In the two minutes we have left, Jennifer, is there anything else, you think investors should know about Tivic or about your plans that we haven't yet covered?
I mean, we've covered very broadly. I should mention we do have strong intellectual property portfolio. We and an experienced management team. So, I'm very proud of the fact that we have developed an internal technology that can continue to extend the business opportunity for Tivic. We have, over time, also been looking at evaluating opportunities for non-or for inorganic-type growth. But with where we are right now, I'd say we still have significant growth opportunity in our first product, the product that is in market today. Those numbers are starting to turn. This last year, we did actually run into a technical problem with one of the chips in the device, so that meant we had a bit of a reset at the early start of the year.
Those numbers are starting to turn around now with having released a new product that fixed the big issue, and we have significant R&D inflection points along the way of this vagus nerve stimulation, so from an investment standpoint, good fundamental IP in place, long-term opportunities, some short-term growth, and some short-term catalysts that should make an exciting opportunity.
Okay, great. And I think, we're just right up against the time, so that was a great overview, but very informative. We look forward to continuing to track your progress, so thank you for joining us today.
Yeah. Thank you for this opportunity.
Look forward maybe to seeing you in New York when you're here at the end of October.
Yeah. Thank you.
Thank you, Jennifer.