Medsider: Learn from Medtech and Healthtech Founders and CEOs - From Circuit Boards to Brainwaves: Interview with Noctrix Health CEO Shriram Raghunathan

Episode Date: August 9, 2023

In this episode of Medsider Radio, we sat down with Shriram Raghunathan, a neuroengineering pioneer and CEO of Noctrix Health.Shri has been leading his team in the development of innovative solutions to improve the lives of patients with neurological disorders like restless leg syndrome, aiming to level the playing field between medical devices and pharmaceuticals in patient care.In this interview, Shri talks about how a mindset of exploration has driven his venture into the development of novel medical solutions within the challenging terrain of neurology. He also offers valuable insights on the critical importance of focusing on unmet needs, building a high-performance team, and navigating regulatory and capital-raising challenges. Before we jump into the conversation, I wanted to mention a few things:If you’re into learning from proven medtech and health tech leaders and want to know when new content and interviews go live, head over to Medsider.com and sign up for our free newsletter. You’ll get access to gated articles, and lots of other interesting healthcare content.Second, if you want even more inside info from proven experts, think about a Medsider premium membership. We talk to experienced life science leaders about the nuts and bolts of running a business and bringing products to market.This is your place for valuable knowledge on specific topics like seed funding, prototyping, insurance reimbursement, and positioning a medtech startup for an exit.In addition to the entire back catalog of Medsider interviews over the past decade, premium members 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, here's a link to the full interview with Shriram if you prefer reading.

I think if you get enough engineers in a room and enough coffee or beer, you could solve most problems. It's mostly are you solving the right problem? Or are you framing the problem in a manner that the solution actually makes sense? 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. 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 Sri Raghunathan, a neuroengineering pioneer and founder of Noctricks Health. Shri has been leading his team in the development of

innovative solutions to improve the lives of patients with neurological disorders like Restless Leg Syndrome, aiming to level the playing field between medical devices and pharmaceuticals in patient care. Here a few the key things that we discussed in this conversation. First, in the medical device industry, need to have products come with much lower friction than want to have products. Focusing on the unmet patient needs rather than trying to create a new market for your solution will often yield much better commercial results. Second, surround yourself with talented, insightful people who are not afraid to challenge your assumptions. This type of high-performing team can help you navigate risks and offer fresh

ideas to drive your venture forward. Third, it is crucial to validate the scale of the problem and demonstrate your device's capacity to solve it. This not only manifests the true value of your solution, but also paves the way for its reception. which is key to attracting the right investors. Before we jump into this episode, I wanted to let you know that we just released the latest edition of Medsider Mentors Volume 3, which summarizes the key learnings from the most popular Medsider interviews over the last several months with folks like Jim Persley, CEO of Hinge Health, Carol Burns, CEO of Cajent Vascular, and other leaders of some of the hottest

startups of the space. Look, it's tough to listen or read every Medsider interview that comes out, even the best ones. But there are so many valuable lessons you can glean from the founders and CEOs that join our program. So that's why we decided to create Medsider Mentors. It's the easiest way for you to learn from the world's best medical device and health technology entrepreneurs

in one central place. If you're interested in learning more, head over to MedsiderRadio.com forward slash mentors. Premium members get free access to all past and future volumes. If you're not a premium member yet, you should definitely consider signing up. In addition to every volume of Medsider mentors,

you'll get full access. to the entire library of interviews dating back to 2010. This includes conversations with experts like Nadine Yared, CEO of CVRX, Renee Ryan, CEO of Kala Health, and so many others. Learn more by visiting MedSiderRadio.com forward slash mentors. All right, Shree, welcome to Medsider. Appreciate you coming on.

Pleasure. Pleasure to be here, Scott. Good to meet you. Yeah, yeah, likewise, likewise. And it was interesting in the pre-show. We were jamming a little bit about backgrounds. And as is the case, a lot of times, right? We know a lot of the same people, right, in this small little med tech world. But with that said, I'm looking forward to this conversation, especially considering the device that you're developing has kind of, you know,

a consumer flare, a consumer bent towards it. I'm sort of personally passionate about these areas of med tech. So with that said, though, before we go too deep on company, the device that you're in the process of launching, give us an elevator pitch for your kind of professional background leading up to taking on the CEO role of Noctricks. Sure. And pleasure to be here and talk to you, Scott. This is fantastic. It's always good to see passionate entrepreneurs and you've put together a great forum and a great, you know, sort of a podium to highlight what goes on behind the scenes in MetTech. So thank you for doing that. Very excited to have this conversation with you. I am an engineer by training. So I like to take. think I am, but I'm reminded I was an electrical engineer and used to design circuits and you know circuits that went into cell phones, ASIC design is, you know, what I used to do. And I really

got intrigued by by music and neuroscience. So it's most, mostly, you know, how does the brain kind of perceive music and how do you know when something's key, off key, you know, I used to dabble in music in college and got really intrigued to wear my PhD in neuro-eastern. And neuro-eastern. engineering. So I figured out, well, neurons are just circuits. They just turn on and off. So how hard can this be? It turns out that was, it was way harder than I thought it would be. But it was a great time getting to apply some of the electrical engineering skill sets into developing implantable devices. Back then, it was in, you know, mice and rats. And we designed devices that would detect seizures and suppress seizures. And then I worked in industry for a while. I was designing

vagus nerve stimulators for patients with epilepsy, Tin Canaan Ali, that goes inside your body. We worked on some very cool algorithms to make it responsive and turn on and off when it protected seizures. And across the board, what was frustrating for me to see was that the number of patients that could benefit from these game-changing therapies were really getting it after they failed every positive medication because it was understandably risky, it was a surgery, was an implant. So to your point earlier, this whole consumer aspect of MetTech is very exciting to me

because it now presents medical devices as potentially a true alternative or at least on the same level playing ground as a pharmaceutical option, which I think could be a game changer in the future. When I was a, this was back when I was an industry, I came across this program at Stanford called Stanford Biodesign. And this is really bringing together engineers

and folks from the business side of the fence and doctors, they got to quit their job, spend a full 12 months on campus at Stanford and not worry about solving problems, but really worrying about what's worth solved. You know, what is truly an unmet need, working with the business school. So I did that, and that was a fantastic experience.

We were observing in one of many areas, which was sleep, and came across, you know, restless leg syndrome when I was observing a bunch of patients that were being studied overnight, being assessed for sleep apnea. And I had never heard of RLS. Prior to that, I'd worked about 12, maybe 14 years in neurology, epilepsy, Parkinson's, depression, nothing about RLS. I just thought, hey, that's when you shake your feet under a table maybe?

Is it restless legs? What is that? And I was shocked by what we were able to dig up and find out, and find out that, you know, 25 million adults had RLS in the U.S. and about a third of them were on Parkinson's drugs to treat RLS, dopaminergic agonists, basically. And the mechanisms were very, very neurological to me. And that really got us very excited about potentially coming up with a medical device solution for RLS. And it also played well into my passion of saying, hey, why can't we get med devices to the same platform as a pharmaceutical?

and this presented sort of a golden opportunity, one that I've rarely ever seen before where patients, of course, are like, hey, where can I get something that's not a drug or, you know, my drugs aren't working? And physicians are like, well, I actually kind of hate what I prescribed to these patients. I wish I had a better option. So that push in the pool kind of naturally existed in the market, which is, which was very rare to me personally. And that's really how we got started with non-tricks and starting to pursue an angle on Russell's leg syndrome. Got it. That's super helpful. And in your bio, you forgot to mention that you're a Purdue boiler maker, right?

Oh, that's right. That's right. I always like to call it out. This is a good time to mention that. Yeah, because we did have a pretty good basketball season except for the one game where we disappeared. And I still watch my Big Ten. So proud boiler maker for sure. That's right.

Whenever I see someone with an engineering degree from Purdue, I always know they're pretty legit, right? It's a really solid, really solid engineering school for sure. But, but, but yeah, now, that's super helpful. So Noctrix spun out of the Stanford biodesign program. I had no idea that RLS or Restless Lake syndrome was this big, like the prevalence was that high. I mean, I've heard of it loosely, but not overly. I mean, I never really spent much time kind of, you know, learning about it. So your device, right, which I, you know, in the kind of when we were chatting before I hit the record button here, I said the NXT 100, right? But it's since rebranded, you know, you're in for all on launch mode as NEDRA.

But tell us a little bit more about like, you know, again, without going too far into the weeds, what does it do? Like if I'm a patient, like hearing about this from my, from my physician, you know, give me a high level sense for kind of mechanism. Sure. So RLS is a very clinical diagnosis. So most patients have come into a doctor and say, hey, I've got this urge to move my legs.

And when I get up and walk or kick my feet, I feel better. So that is the insight that we really teed into to say, well, what about movement or what about kicking your feet or what about walking, you know, makes you feel better, even if it's temporarily. We, in fact, had patients that said they had an exercise bike right by their bed. They would hop off bed, get on the exercise bike, go crazy for about five minutes, and try to jump back onto bed and fall asleep. So we really started digging into that insight.

That was really the hallmark of RLS, which distinguished it from a bunch of other kind of leg movements at night or things like that. We decided to say, well, what if we elect. Stimulated the aphrine nerves in your lower legs that basically told your spinal cord that your lower leg muscles are engaged, but they're not actually engaged. So, you know, could we, in other words, scratch this itch with electrical stimulation and trick your brain into thinking that your muscles are engaged and you're moving your feet and you can actually fall asleep naturally. Now, the key is to do this in a way that doesn't actually, you know, cause the prosthesis,

from stimulation to disrupt your sleep to begin with, so in some sense, the solution would be worse than the cure, the problem, you would have to stimulate in a manner that selectively hits the aphron nerves that is compliant with sleep, that patients can't feel the stimulation or it feels comfortable to them to be able to fall asleep. So that's the hypothesis that we latched onto, and we looked into an assay that provoked RLS. It's called the suggested immobilization test or SIT, where you get patients to sit on a bed with a, their legs stretched out at night. And basically patients with RLS, this is a torture test.

They cannot sit there for long enough. And we played around with waveforms and nerve targets. And sure enough, we wound up with a nerve target that instantaneously relieved symptoms of RLS when we started electrically stimulating it. So the device was born from that insight. And today it's basically two leg-worn devices that you wrap around the common perineal nerve that is on the outside of your knee on both legs. And it stimulates patients wear it right before they go to bed.

They turn it on. The device is personally calibrated or titrated for each patient. So there is a fitting session that happens after they get a prescription from their position. And once their settings are programmed into the device, they go back home and they get to use it every night before they fall asleep. The device turns itself off. So they don't really have to take it off. Most patients fall asleep with the device.

on. And much like any device that is wearable that is on your body, we could record a bunch of other parameters as well relating to objective and subjective measures of how the patient is sleeping. So this is a chronic in-home therapy that is obtained via a prescription. Most patients would pick this up from their sleep doctor, much like a CPAP or sleep apnea, and they would continue to use it on an ongoing basis at home. Got it. And so it requires a prescription. So is it covered and reimbursed as well, or is this a cash pay sort of option right now for patients? So this is a brand new device entering a pharmaceutical space. So there is no predicate for a device in the space. We certainly aim to seek insurance coverage. We believe that that's the best way

to get market access, widespread market access across not just the populations that can afford it, but populations that need it. So we are seeking new reimbursement codes. And we're actively pulling together a full reimbursement team in-house. So as a company, we've decided to become a DME or a durable medical equipment manufacturer. We have our in-house billing. We take care of appeals and prior odds and things like that up front to make sure that we can get a designated code or a dedicated code for this deal.

Got it. Got it. That's super helpful. And I think what a kind of a rewarding space to be in, right? because as you mentioned, even before we hit the call record button, I had no idea that not only does RLS affect this many people, but how like severe the symptoms can really be. And for anyone that's struggled with sleeve, like even at like a reasonably like superficial level, it's terrible, right? But, you know, these folks will go, what do you say months without like, you know, on very,

very little sleeve? Absolutely. Absolutely. In fact, behind my desk right here is a, you know, we constantly get these from patients all the time. This is, you know, we have a very limited presence online and, you know, just press releases every now and then this is, you know, a lady from Michigan that has written us a letter and hand signed that letter. Wow. And she is 83 years old. And she feels like, so she has struggled with RLS since she was a teenager.

And she was always told these were growing pains and, you know, I can get, I'm very frustrated with how little I can accomplish. She's 83. And she's just absolutely desperate. And she's like, I would love to get some more information and, you know, sign up to get early access to the therapy. There's been, you know, the physicians we work with are phenomenal. I mean, they're absolutely, this is not just a job. It's a calling to them.

They constantly forward some emails that they receive from patients that, you know, move our team to tears. It's just, you know, individual patient stories that say, hey, you know, my doc thinks I'm psychotic. You know, my husband forced me into a car to take me to the hospital, to the ER, and they had to give me, you know, penzos to calm me down. And it's, I have anxiety, but it's not because I'm anxious. It's because I have RLUS. And I just need to, you know, get something that is not, you know, making my symptoms worse. And unfortunately, the mainstay of treatment for RLS is dopamine. agonists. These come from the Parkinson's world, which I'm sure you're familiar with, but dopamine,

unlike in PD, in the case of RLS, have been, they've been known to make the disease worse over time. In that, you know, if your symptoms used to start at bedtime and, you know, your bedtime used to be seven or eight o'clock or nine o'clock, those symptoms would start earlier and earlier and earlier and you need more and more and more dopamine. And this is a phenomenon that's fairly well documented called augmentation, where patients need more dopamine over time. And their symptoms now start at 4 p.m., 3 p.m., 2 p.m. And gosh, in our trial, we've had patients that use it in the afternoon, because they have symptoms in the afternoon.

And getting them off of dopamine is incredibly challenging, so much so that now the standard of care guidelines are finally being updated to where dopaminergic agonists are no longer becoming or recommended as first-line treatment for RLS. So slowly but surely there's a change, but it's incredibly impactful to work with, you know, work with a device and a therapy and a team, especially for patients that you could see the impact very, very tangibly in a very short period. Our trials are in eight weeks, 16 weeks.

So within that time period, you actually get some pretty life-changing quotes and feedback from the patients, which is incredibly compelling and motivating for the clinical team and the rest of the, the company. Right, right. That's cool. It's one of the one of the reasons I'm kind of personally passionate about these, you know, like I said before, these devices that have a little bit of a more consumer bank because you're that much closer, right, to the patient or, you know, the person, the human being, you know, in this, in this instance, that's probably one of the most rewarding aspects of working in this space. It could be hard. It could be brutal. It can be like, you know, feeling like you're playing the game on hard mode all the time. But it is, you know, you're making a

pretty significant impact, right, on someone's life, which is, which is really, really cool. Hands down the number one perk of my job. Yes. Yeah. No doubt. So, well, cool. And then just real quick, before we kind of, you know, sort of rewind the clock and learn a little bit more about, you know, some cross-functional areas of the company.

And what you've learned kind of along the way, building up a Nautrix. But you guys are in launch mode, right? You're launching the device as we speak? Correct. So we actually got our FDA green light. We were at De Novo 510K. So we got our DeNobo granted about five weeks ago to date. Okay.

And the team is. been scrambling. We've been building our commercial team as we speak. And we are about to start what we're calling a controlled release over the next 12 months in the U.S. where we'll be available in a limited number of sites. And we plan to start working out the kinks and start scaling from there. But we're going to use the first 12 months really to make sure that we have enough product. We have the ability to service patients and clinics appropriately. And we have the systems in place to scale from that point forward. And of course, obtain coverage, reimbursement codes and coverage for the therapy. Cool. That's awesome. So we're recording this in late Q3,

you know, and so it sounds like the de novo, the de novo came through positively, I guess, in kind of mid- Late Q2. Late Q2. Okay, got it, got it. Cool. You just scared me there. That's a whole. Oh, we're in Lake Q2. That's right. I said Lake Q3. Yeah, my, I'm off here. Yeah.

That's right. So we're recording this in Lake Q2. So June of 23 is you, if you're listening to this conversation after the fact you get got a sense for when, you know, Noctrix got the stamp of approval from FDA. So thinking back to some of the earlier versions, right? You're probably coming out of the Stanford biode design program. You have a sense kind of maybe for where this is headed. But, you know, looking back, are there a few things that you learn through that, those early iterations kind of going from alpha to beta that either you would have done differently

or maybe even things that you really got right, you know, trying to, you know, move quickly, but also, you know, be capital efficient at the same time. Yeah, I think if I, gosh, I think the one thing that I keep going back to is that you have to be absolutely sure about, you know, getting that unmet need right. And that's something that programs like San for Biodesign do very, very well. from day one to today in the company, you know, we've gone through, we've tried various solutions, we've changed our, you know, clinical trial strategy, some, we've fine-tuned a lot of things. The one thing that you absolutely cannot change is your unmet need. It's like, that's, that's remained

our North Star and said, like, and that better be a big, strong unmet need that has a huge market because you can change everything else around that. You could change your team, your product, your technology. You can't change the problem. So if you've got a solid problem that you're working on that unmet need will stand the test of time. There's not much to worry about in terms of, you know, there's always concern. Should I be doing more PR? Should there be a media blitz? You know, should I go out and say, this is a stealth company doing X or Y or Z? I always go back to say, remember that to your point, you know, we're in a market to serve. Right. So we're, we're, ultimately patient has to be, how many patients can you get this on?

How many patients' lives can you change? Those are the metrics that matter and that strong unmet need with a big market. It rarely needs a ton of publicity or hype or, you know, we have to remember that we're in a market where things are needs, not wants. People do want the latest iPhone and the latest Apple Watch and all of that, but nobody wants a new pacemaker. It's a need. And making sure that you focus and spend as much.

much time as possible understanding what that unmet need is and who it is an unmet need for really allows the rest of the operation to go smoothly. So the early part may take longer in making sure that you vetted this out, but it pays dividends on the back end because our clinical trial outcomes really matched up with what our reimbursement needs are and our clinical trial outcomes matched up with what regulatory wanted to see. So there was a lot of stakeholder alignment that winds up happening if you do spend that time up front. I would say the other thing that I've been fortunate and lucky to have is just surrounding yourself with amazing people.

There are four million reasons why companies can fail. And as I'm sure, as an entrepreneur yourself, you're living with, and there's risks every turn. But having people around you that are really, they bring out the best in you, and they're constantly making you, you know, pause and think about like, oh, there is another viewpoint here. And, you know, giving them skin in the game and, you know, setting ego aside, rolling up your sleeves and say, no job's too small, you're going to have to be involved in every part of building this company. I think to me, those two things really help early days of NACRIPs. I was fortunate to have a lot of

people around some people now that I work with today, including, you know, my founding team and some of my management today and just mentors and advisors that offered free advice. And I would sit down, buy them a coffee or a beer and, you know, have a conversation about, hey, how did you do it? How did you do X or Y or Z? And the amount of time that they would be willing to take to sit down and talk to you about this, it's just invaluable. I mean, it's something that I couldn't even put a value on it. And I would love to give back in any way or shape that I can. I think those made a problem. big difference early days and numbers. Hey there, it's Scott, and thanks for listening in so far.

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