Medsider: Learn from Medtech and Healthtech Founders and CEOs - From Academia to Medtech Entrepreneur: Interview with SpineX CEO Parag Gad

Episode Date: October 4, 2023

In this episode of Medsider Radio, we sat down with Parag Gad, who founded SpineX to turn cutting-edge science into life-changing devices. The FDA has granted Breakthrough Device Designation for two of SpineX's non-invasive products aimed at improving the lives of adults with neurogenic bladder conditions and children with cerebral palsy.Parag understands both sides of the coin — the research-intensive academic world and the rigorous standards of healthcare regulation. With SpineX, he's marrying the two, aiming for a transformation in spinal healthcare. The company has raised $3.6 million in equity financing and has also secured non-dilutive funding from government agencies. With ongoing multicenter clinical trials and plans for future enrollment, Parag is steering SpineX toward a new frontier in bioelectric medicine.In this interview, Parag delves into the intricate journey of transitioning from academia to entrepreneurship, securing non-traditional funding, and the role of regulatory milestones in building a reputable healthcare brand.Before we dive into the discussion, I wanted to mention a few things:First, if you’re into learning from medical device and health technology founders and CEOs, and want to know when new interviews are live, head over to Medsider.com and sign up for our free newsletter.Second, if you want to peek behind the curtain of the world's most successful startups, you should consider a Medsider premium membership. You’ll learn the strategies and tactics that founders and CEOs use to build and grow companies like Silk Road Medical, AliveCor, Shockwave Medical, and hundreds more!We recently introduced some fantastic additions exclusively for Medsider premium members, including playbooks, which are curated collections of our top Medsider interviews on key topics like capital fundraising and risk mitigation, and a curated investor database to help you discover your next medical device or health technology investor!In addition to the entire back catalog of Medsider interviews over the past decade, premium members also get a copy of every volume of Medsider Mentors at no additional cost. If you’re interested, go to medsider.com/subscribe to learn more.Lastly, if you'd rather read than listen, here's a link to the full interview with Parag Gad.

what's the MVP, what does that need to look like? What do I need to do to get a product that I know it may not be perfect, it will not be ideal, it won't have all the features that I need to have it, but it does what it needs to do. So once we were able to define what that zero to one stage was, it really helped get the initial alpha device in place. Welcome to MedSider, where you can learn from the brightest founders and CEOs in medical devices and health technology.

Join tens of thousands of ambitious doers as we unpack the insights, tactics, and secrets behind the most successful life science startups in the world. Now, here's your host, Scott Nelson. Hey, everyone, it's Scott. In this episode of MedSider, I sat down with Dr. Parag God, who, after 12 years at UCLA, co-founded Spinex to turn cutting-edge science into life-changing devices. FDA has granted breakthrough device designation for two of Spinex's non-invasive products aimed at improving the lives of adults with neurogenic bladder conditions and change. children with cerebral palsy. The company has raised nearly $4 million in equity financing and has also secured non-diluted funding from multiple government agencies. With ongoing multi-center clinical trials and plans for future enrollment, Prague and his team are steering Spinex toward a

new frontier in bioelectric medicine. Here are a few of the key things that we discussed in this conversation. First, moving from academia to entrepreneurship brings a whole new set of challenges. Be prepared for a steep learning curve as you navigate the various operational, financial, and technological hurdles. Surround yourself with experienced and passionate people and commits clinical evidence to inform your decision-making. Most importantly, never stop learning. Second, building credibility is crucial for long-term success. For Spinex, FDA's breakthrough device designation for its flagship products has certainly helped. Explore possible routes to demonstrating trust and remember that establishing legitimacy early on can have a lasting impact on your company's success.

Third, there are viable alternatives to venture capital for securing funds for your startup, such as grants, for example. While submitting them can be meticulous and time-consuming, it's not impossible to master. Illustrate both the social impact and commercial viability of your product to raise the odds for securing this type of non-dilative capital. Okay, so before we jump into this episode, if you're listening to this show, I'm going to make the assumption that you're a dedicated pro looking to learn from the best in the business. If that's the case, which I think it probably is, I've got some exciting news related to our

premium memberships. First, let's talk a little bit about Medsider Playbooks, your ticket to going from zero to 100 with your company or your career. You see our team has handpicked collections of the most insightful interviews with the brightest founders and CEOs, people like Nadine Yard, CEO of CVRX, and Mike Carousie, a serial med tech entrepreneur and general partner at Lightstone Ventures. These proven leaders share their strategies and tactics for running a successful startup. Whether you're looking to master capital fundraising, navigate early stage development,

tackle regulatory challenges, understand reimbursement, or maybe even position your venture for a meaningful exit, Medsider Playbooks have got you covered. And the best part, all of them are available to our premium members. Get instant access to these valuable resources at Medsiderradio.com for its Again, that's medsiderradio.com forward slash premium. Okay, here's the second thing. I completely understand that fundraising can be one of the most daunting tasks for any startup, especially in today's environment.

That's why we've created a meticulously curated database of investors right at your fingertips. Explore a wealth of VC funds, private equity firms, angel groups, and more, all eager to invest in medical device and health technology startups. Access to this database is a premium member exclusive, so don't miss out. But that's definitely not all. When you become a MedSider premium member, you'll get access to, to every volume of Medsider mentors, where the brightest founders and CEOs share their invaluable learnings, plus you'll unlock the entire archive of every Medsider interview dating back to 2010.

So if you're serious about advancing your career or your startup and want to tap into this treasure trove of knowledge, it's time to consider becoming a Medsider premium member. Visit medsider radio.com forward slash premium to learn more. All right, without further ado, let's jump back into the interview. All right, Parag. Welcome to Medsider Radio. Appreciate coming on. Thanks, Scott. Thanks for the invitation. Glad to be here. Yeah, I love the, you know, obviously for everyone listening, they can't see the Spinex logo in the background, but I love the fact that you're on brand representing the company well. So with that said, I recorded a brief bio on your background at the outside of this episode.

But let's start there. If you can kind of give us an elevator style sort of overview of your professional experiences leading up to Spinex, that'd be great. By qualification, I'm a biomedical engineer, but I often share this with, you know, people that speak to that I'm true. trained in neurophysiology and I often complain that while I'm an engineer, I know more have the skills of an engineer. And my mentor, Dr. Reggie Ajeton jokingly says that, well, I'm glad that is the case because I can mold an engineer to be a physiologist and not the other way around. So by, yes, by qualification, I'm a biomedical engineer, but have trained in neurophysiology at UCLA for about 12 years before we took the official dive into entrepreneurship and launched

Spinex in 2018, 2019, and been the co-founding CEO ever since, and been leading the charge towards bringing our technology to market. Cool. Awesome. That's a super helpful overview. Let's talk a little bit about both of your products. I think it's two currently that you're in clinical trials with, but it's, I'm not sure how you pronounce it, but is it Skone and then SCIP?

Or am I, what's the best? Yeah. Scone and Skip. Yeah, Skone and Skip are two products that we're developing. I do want to clarify that while there are two products, they're essentially based on the same platform technology. So there are two faces of the same coin that has been developed by Spionix and the team. So most startups would focus on one product and try to be successful with that and I'm not sort of de-focus. Our objective here is really to kill two birds with one stone.

We have developed platform technology and no it has multiple applications and have been able to identify two areas that impact individual. and their quality of life significantly, which is where Skon and Skip come into picture. So we're not developing two unique products. They're unique in their own ways, but they're essentially part of the same platform technology. Got it. So there's synergy between both.

And can you give us a high-level overview of the differences between the two and kind of what they do? And maybe kind of frame that up as if I, maybe I'm a freshman in high school, and I'm just trying to get a high-level understanding of kind of how these devices work. So if you're looking at it in a very naive manner, scone essentially is your iPad Prob and Skip is an iPad Mini.

That's essentially what it is. They both are based. They're identical in performance and function. They serve different purposes. One is larger. It's meant for an adult. It's specifically designed for adults that live with neurological conditions such as spinal cord injury, stroke or multiple sclerosis,

and are living through bladder dysfunction and have trouble holding urine in the bladder and often have incontinence or urgency and frequency. So the school is meant to treat neurogenic bladder as an indication. Skip, on the other hand, is meant to treat the pediatric population. So children that live with cerebral palsy and have difficulty sitting upright or holding their head up or difficulty moving, Skip is meant to train sensory motor function in this population. But they both come from the same basic technology, which is spinal neuromodulation. And what we've essentially done is identified ways in which we can

electrical neuromodulate the spine cord in a completely non-invasive and non-surgical manner, which is placing hydrogen or patch electrodes at different levels of the spine along the back and deliver low intensity electrical pulses to the spine cord. What we do is we activate the nerves in the spine cord and by activating these nerves, we amplify some of the weak signals that are communicating between brain, spine and muscles. By amplifying them, we are essentially working on the principle of a hearing aid, allowing the brain to control what the muscle needs to do and allow the brain to hear what the muscle or the periphery is trying to say. So by reestablishing the synergy or the bi-directional communication, we're able to improve function.

So with this basic idea, scone is meant to treat neurogenic bladder, which includes sensation, incontinence, urgency, frequency, and skip is meant to treat sensory motor dysfunction in children living with a certain policy. Got it. And so, and I'm looking at the website right now, spinex.co, if you're listening to this and don't get a chance to to read the full summary write up for this particular discussion with Parag, go to spinex.com, S-P-I-N-E-X.co, and you can get an idea of Skip and Skone, the two devices that Brog just described. So it sounds like kind of the magic sauce, and I don't have deep domain expertise, kind of in neuromodulation, but sort of the magic sauce is the fact that these devices are non-invasive, as you mentioned. They're sort of wearable, right?

And you figured out a way to do this, I guess, not to repeat myself, but in a very non-invasive way, in essence. In addition to that, it's completely painless. So you're not causing any pain or discomfort to the user. And the beauty of it is it's not something that you have to wear continuously. You wear it for an hour a day, a couple of times a week. And you're able to induce what's called neuroplasticity in the brain and spine cord. So the improved function that you're observing is not only present when the electrical neuromodulation is actively delivered, but you're actually causing changes in the organization of this brain and spine cord,

allowing them to retain function even in the absence of active stimulation. So for a child, for example, with CP who comes into the clinic, receives therapy, goes back home. It's not like he or she has lost function. They're able to retain that level of functionality, even when stimulation is not actively delivered. Got it. Cool. Give us a sense for kind of where the company's at currently. We're recording this in August of 2023. So give us a sense for kind of where you're at in terms of kind of the life cycle of the company.

So in the grander scheme of things, we are a fairly early stage new company. We've been active for about four and a half years. We officially were incorporated in December 2018. So we are about four and a half years into being around. The first product scone is currently undergoing multi-centre clinical trial for FTA registration. Skip is expected to begin a multi-centre clinical trial for FTA registration in the first quarter of 2024. While these may seem fairly relatively simple steps, there's a tremendous amount of clinical research that's already been conducted to get us to this point where with scorn we have treated

between 30 and 35 patients living with neurogenic bladder and have observed significant improvement in their bladder function. Skip on the other hand, we have treated about 46 children with CP and a few adults and have observed significant improvement in their quality of life and their ability to move. Based on these results, both Schoon and Skip have been recognized by the USFTA's breakthrough devices, which essentially provide us with an expedited pathway for regulatory clearance. Got it. Very good. So pre-commercial kind of clinical stage company, Schoen in clinical trials right now. Skip, it sounds like you're just on the on the precipice of commencing that work in early 2024. I think that kind of sets the stage for allowing us to

sort of go back in time, right, and kind of revisit some of the early years and building company coming out of kind of your academic career. But let's start there. There's a lot of physicians as well as, you know, master's PhD academics, you know, whether it's a physician that has a, as a good idea based on their clinical practice or, you know, a master's or PhD, you know, that has a great idea coming out of, you know, traditional academia. There's a lot of those folks that listen to this program. So we'd love to get your take kind of kind of going back in time, you know, coming out of that traditional academic sense. You know, what were a few things, you know, that, that, that, you you either did really well with that transition or, you know,

you know, key things that you kind of learned in that, you know, that transition to kind of start up entrepreneur. I think there were several, several learnings for the first few years when we were considering transition the technology out of academia. The motivation for us to, you know, really transition it out of academia was we had, so for gold mine in front of us that, you know,

that technology that actually was benefiting people. So limiting it to a lab environment where, you could treat five, ten individuals a year didn't seem right. That's really, you know, which was our primary motivation saying, okay, there needs to be a platform where this technology can be brought to the forefront and brought to market. What we didn't realize at that point, obviously in our, in a naive sense, and again, this is as a first time CEO, as a first time founder, you know, you have a learning curve,

is the transition between the academic world to the real world in terms of, all the various steps that you need to undertake. Publishing a paper, publishing a clinical study, obviously has its own challenges and has its own needs and requirements, but getting a product to market is probably a hundred times harder than that. That's really where our early years went in talking to people. I was shameless. I was, you know, open saying, okay, I don't know the answers to certain questions.

I know what I know and I know what I don't know. So I need to find out more. So just kept talking to as many people as I could. but along the way, we knew there were a few key things which was critical, which is collecting enough clinical evidence that this actually works. We're not basing this on a hunch or an idea that we have had and coming up with a product overnight. This is based on solid clinical evidence, peer-reviewed publications, expert opinions from

KOLs that this technology is valid and there is a need for this in the market. So once we had established that initial product market fit, and we have established that initial product to market fit. spoke to people about how do we go about taking this, transitioning this from an academic idea, academic in a prototype into a commercial product, and what are the various steps involved in that? I think having those conversations and understanding the challenges in front of us was really key. We didn't have the answers. We just knew that there were several new questions that needed to be answered,

which we didn't know back in 2017 when we were considering launching sphinx. Got it. So it sounds like one of the keys was, to your point earlier, being unconstitutional. unashamed about or un, bold, I guess, in your, in your, you know, willingness to sort of ask not only a lot of questions, but go kind of broad, right, and asking those and asking those questions. And I think that's something that I think has come up over and over again, you know, in interviewing other, you know, founders and CEOs of, you know, life science and med tech startups to be more specific. That's a key kind of along the way. Like if you're, if you're afraid to sort of feel like

maybe ignorant, right? If you're, if you're afraid of that, that's usually not going to result well. I mean, you got to be, got to be comfortable kind of, you know, asking, asking a bunch of questions. But you touched on sort of like a lot of, you know, you're flexible and iterated like in those early years based on a lot of the feedback, you know, from all of those questions that you answered. But let's kind of go back in time and learn a little bit more

about that process developing kind of the alpha and beta versions of Skone and then Skip. And I'm sure it sounds like Skip came after Skone. But when you think about like the development of, in granted, there's a lot of synergy, as you mentioned earlier between the two different devices. But when you think about the development for maybe Skip versus Skone, And were the things that you kind of learned that helped you, you know, fast track, you know, skip, you know, in the early development of alpha and beta and the alpha and beta devices?

And the reason I ask this is like, that's so crucial, right, in the early stage mettech ventures, be as, you know, being as capital efficient as possible in those early phases, right? You're up against, you know, very limited resources. So just curious to kind of get your take on how you kind of navigated those, those early years with Spinex. I think there were two key guiding principles for me personally, right from the beginning. first, which I would refer back to Peter Thiel's 0 to 1 book, which is, what's the MVP? What does that need to look like? What do I need to do to get a product that I know works? It may not be perfect.

It will not be ideal. It won't have all the features that I need to have it, but it does what it needs to do. So once we were able to define what that 0 to 1 stage was, it really helped get the initial alpha device in place. The initial alpha device, when you look at it now, we probably laugh at ourselves as to what we put together, but it worked. It did the job. That one key learning and one key approach and mindset was critical for us to approach this problem. The second, which is a little uncommon, unconventional, is what is the data telling me?

That was a question that we would ask ourselves continuously and with every stage along the way, every stage along the way is what is my data telling me? data could be clinical data, that data could be feedback to users, their data could be engineering data. Making decisions based on solid clinical, solid evidence in general really allowed us to ensure that we didn't have any bias that was driving us in a certain direction. So really ensuring that we had enough evidence. And if we didn't have, go and ask more questions. Be ashamed us and ask more questions and get the evidence that you need to. That really allowed us to, again, be very, very capital efficient in our transition from being an academic spinoff to an early stage company to now a clinical stage company.

Got it. The book you referenced by Peter Thiel, you know, 0 to 1. Great, great book. If you haven't read that, highly, highly recommend it. I love your answer, especially the first part of your answer, really reminded me of something that Dr. Scott Wolf mentioned. I had him on the program maybe a couple of years ago. He's the founder of Cool Sculpting, which I think a lot of people that are listening are at least somewhat familiar with that technology. He's also the founder of Aaron Medical, and I think he's on to some other things at this point, too. But he mentioned, like, you know, even with respect to Aaron Medical, like the generator and the system that they were using, right, in the early stages of their clinical work looks nothing like the generator that they're

commercializing, right? And he said, you have to, you know, as a mettech entrepreneur, you have to be comfortable with, like, sort of getting to that point where it works, right? It does the, that does the key thing or the key things that you need it to do, but the aesthetics may not be great. It may not be, the user interface might not be perfect, but that's okay, right? As long as you're, as long as it does like the most critical, serves the most critical functions, you know, that you're, that you're aiming for. You know, that's what you're after, right? In those, in those early stage. And it sounds like you kind of followed a kind of similar, similar framework in the early days of Spinex. Cool. Prarague, let's, let's transition to, to kind of the reg clen functions. And I know,

with respect to kind of gathering, whether it's bench data or clinical data, this is probably a little bit more of your wheelhouse. And it seems like, you know, coming out of, you know, sort of academia, you guys have been pretty prolific in this kind of function, considering Spinex, isn't that old of the company. And, you know, there's a lot of, you know, MedTech entrepreneurs that are listening to this that don't maybe have, maybe that's a little bit more daunting to them, right? Kind of tackling this, this, this, this boulder and pushing, pushing kind of more that the clinical, clinical affairs function up the hill, so to speak. So when you think about this, any, any kind of words of wisdom or like, you know, best pieces of advice for other life science entrepreneurs that are

beginning kind of laid out this, this kind of clen reig roadmap and, you know, how to get there in the most efficient way possible? One of the keys for us really was to get the right people on the team. Without a team, any, any ship is going to sink. I think early on, we brought on one of our co-founders, Dr. F. Gennie Kradin, who was a urologist based here in Los Angeles. He obviously played a very critical role in developing the early clinical protocols, everything related to our neurotic batter that would credit a Kenny. And he was really played a pivotal role in transitioning the idea into something that was tangible.

During discussions with the FDA, having a urologist on our team answering questions on behalf of the company and addressing the needs of a patient, addressing the needs of a user as a physician, really helped us make a strong case for what we were offering and what our product had on offer. So I think, yeah, definitely having a strong team is the most critical step at this early stage when you are low on capital. So really bring the right people on board and ensuring that there is synergy between the approaches, the mindset, the wavelengths match, and you're able to function as a cohesive unit. Yeah, I couldn't agree with you more, especially with research,

respect to kind of engaging with FDA, having a clinician, right, as part of your team that can help translate, you know, a lot of the, maybe the bench work, right, that you're, that you've done on a particular device or system and helping translate in that to FDA in a, and a kind of an easy to understand way, that's really, really critical, especially if it's a physician that has experience previously with interacting with FDA, that helps all the more. So if you're listening to this and, you know, either preparing for maybe a pre-sup or something like that, highly, highly recommend that you, you know, if you don't already have a physician or a clinician kind of on board.

And I think as an entrepreneur, we are not normal people. There's a, there's a knack to do things in an abnormal and in a different manner. That really is a critical component in terms of the wavelength matching. Finding people on your team that understand why you're doing certain things the way you're doing them, porting them, you know, there's no fixed eight hour a day job profile that we have. There's no fixed job description. So finding people willing to go the extra mile, finding people that are able to jump in and get your hands dirty is really key. So I think that that's really how the team has come together for us over the last four years. And we continue to grow with that basic idea and

basic principle of mind, which is the resource that is your person at. Yeah, such a really, really good point, you know, because I think all of us that are involved in, whether it's preclinical or kind of clinical stage, you know, medical device or life science startups, you know, a lot of us are working with this extended kind of team, some in-house kind of FTE, some, you know, part-time consultants, part-time to full-time consultants. And, you know, looking for those, those kind of skill sets that are going to be a match culturally is really, really critical because you could be working, like as an example, you could be working with a really, really experienced Ray consultant, right? But if they don't have sort of level of comfort with working with an early stage company, typically not going to be a good match.

You know, same thing applies across the board to any sort of specialty. You know, if they're not willing to sort of be curious and if they're not willing to kind of uncomfortable, kind of navigating, you know, some certain terrain, usually is not going to work out, you know. And I personally always look for people that are like, you know, naturally curious, right? And are unafraid to sort of, you know, look at a challenge and say, okay, this would be nice to do it this way. But this is like the minimum viable path to get here, right? You know, sort of the MVP path to a certain, you know, clinical milestone as an example. So, you know, looking for those sorts of skill sets, really, really crucial in kind of building out that early team.

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