The Chris Voss Show - The Chris Voss Show Podcast – Jeff Marx, President and Chief Operating Officer at Cerapedics

Episode Date: October 6, 2021

Jeff Marx, President and Chief Operating Officer at Cerapedics Cerapedics.com

You wanted the best. You've got the best podcast, the hottest podcast in the world. The Chris Voss Show, the preeminent podcast with guests so smart you may experience serious brain bleed. Get ready, get ready, strap yourself in. Keep your hands, arms and legs inside the vehicle at all times. Because you're about to go on a monster education roller coaster with your brain. Now, here's your host, Chris Voss. Hi, folks. Chris Voss here from thechrisvossshow.com. The Chris Voss Show.com.

Hey, we're coming to you with another great podcast. We certainly appreciate you guys tuning in. Thanks for being here, guys. As always, to see the video version of this broadcast, you can go to goodreads.com forward slash Chris Voss. That's actually where my book is, which just launched today, actually, because of leadership. You can go there and check that out. But if you really want to see the video version, like if you really are into the video version, go to youtube.com forward slash Chris Voss. Like I say that.

Also go to our massive amounts of groups on Facebook, LinkedIn, Twitter, Instagram, and all those different places on the interwebs. You can find them all on the interwebs. They will not be on your local newspaper. Just on the internebs. The interwebs alone. Clearly it's like Monday for a Tuesday or something here where I can't see. Interweb.

Maybe the Facebook going down had something to do with that. It broke my internet brain. Hopefully it broke all of our brains, especially the whistleblower. Anyway, thanks for tuning in, guys. We certainly appreciate you being here. We have another great guest. As always on the show, we just put in the Google machine, hey, great guest, and they just pop up.

It's pretty amazing. His name is Jeffrey Marks, and he is currently president and COO of Seropedics. He is responsible for the R&D, regulatory, manufacturing operations, corporate strategy, business development, and medical education. He is the inventor on numerous patents and has lectured extensively on bone biology and bone grafting options. Following the completion of his bachelor's and some graduate work at Penn State University, he completed his Ph.D. in ceramic engineering at the University of Missouri Rolla.

I think I got that right. In 1985? Yes, sir. You got it. There you go. Rolla Rolla. It's all rock and roll to me. Welcome to the show.

How are you, Jeffrey? I'm great. I really appreciate rock and rolla to me. Welcome to the show. How are you, Jeffrey? I'm great. I really appreciate the opportunity and thanks for inviting me to be on. Thanks for coming on. And give us your plugs, your dot coms where people can find you on the interwebs. Yeah. So CERAPEDICS, C-E-R-A-P-E-D-I-C-S is our corporate website. There's all sorts of interesting educational materials on there about our technology, about our product. We have a really cool manufacturing video that's on there or a link to our YouTube. We also have a YouTube channel.com as well. Awesome sauce.

Awesome sauce. So who is this company that you run? We're an interesting company in that we operate mostly in the med tech space. Our focus is really on spine and orthopedics, although outside of the U.S., really anywhere in the skeleton where there is a bone defect that needs to be repaired, our technologies can be brought into play. In the United States, our primary indication that we have FDA approval for is fixing degenerative problems in the cervical spine, so cervical fusion. But again, outside of the US, the technology is used all up and down the spine throughout the skeleton. So it's a really unique technology in that it is a drug-device combination.

The drug component is this little tiny 15-amino acid peptide that comes from our native collagen. So it's a synthetic analog of that, which is where cells attach to the tissues in all of our connective tissues. Oh, wow. So by synthesizing this, attaching it onto the surface of an implant material, when it's implanted, it will turn on the body's native biology to attract, attach, and activate bone-forming cells. Oh, wow. Such that it will lead to a very rapid bone regeneration followed by the material being resorbed. So at some point later on, there will be nothing there, but the patient's own bone as if it had always been there. Oh, wow. This is crazy. My mom,

we just went through knee surgery to get her placement knee. Would this be something people like her could utilize instead of getting a titanium knee? Yeah. It's not really used for functional articulating joints like that, but the primary application is in spinal fusion where people have a degenerative or a progressive spinal structural problem that leads to neurological complications. The surgeon will go in and they will fix the neurological complication or sort of the impingement of the nerve or the spinal cord. Sometimes when they do that, that creates an instability. And so between those two vertebrae,

which they've created the space now for the nerves, they have to stabilize those. So they'll put in some structural elements, metal rods, screws, and inner body implants. But then our material goes in between there, drives the regeneration of bone so that those two vertebrae fuse and become one large bone. Because the structural metal is only going to last for so long and really long-term we want to rely on native biology to do the work. That's amazing. I didn't know that your bone could redo that. I know I've had friends that they've had to have their back fused and they weren't excited about it because I think with manual fusing, sometimes that causes further issues or how does that work? Yeah. One of the challenges, the spine is a really complex structure biomechanically,

as well as biologically. We all are undergoing the degeneration in our spines. So the disc material, the nice little spongy cushion between our vertebrae just loses its ability to hydrate as we get older and it just becomes stiffer and more brittle. Most people don't end up having any issues related to that, but some do. With the loss of disc height, you can get that nerve compression as I talked about. So I think most of us are familiar with, have either ourselves had challenges or have family members who've had sciatic pain or radiating pain down the arm, et cetera, from those nerve complications. So the challenge is if you have degenerative spinal conditions, once you address one segment of the spine, that degeneration doesn't stop.

And you create generally a stress riser that may accelerate the further degeneration. Sometimes it just works its way up the spine. I think surgeons have gotten an awful lot better over time at really addressing the biomechanics and getting the curvature correctly. And when they do those reconstructions to try to minimize some of those longer-term complications. There you go. Yeah, that's what I'd heard. Once you fuse one point, then the rest of it eventually needs to maybe go back and be infused and stuff. Yeah, our spine wants to be flexible.

And so if you take something that wants to be flexible and start stiffening up sections of it, that stiffness gets translated and all the flexibility has to be made up within other segments. Awesome. Yeah. So how new is this technology? Has it been around for a while? Is it fairly new or? Yeah, that's a really interesting question and a complicated answer. So the technology was really discovered in the late 1990s. So a gentleman named Raj Bhatnagar, who was a basic scientist at UCSF, a biochemist and a collagen expert, was looking at the cell signaling properties of various segments of collagen. He discovered that this little part of collagen was where cells attach. And then he just synthesized

it in the lab. And he discovered when he started attaching it onto the surfaces of things, cell culture plates, et cetera, cells would basically stick to it like freaking crazy. And not only would they stick to it, they would be turned on to perform their genetically programmed function. So in the interest of therapeutics application, that's forming bone, but this could potentially have applications in soft tissue regeneration, et cetera, because it has the same effect on a variety of different cell types, depending on where it's applied and how. That's awesome. Could you keep us alive and keep my, maybe you could add more bone to my backbone. Can I get more backbone? Not yet, but maybe that's a, we'll put that down as a future project.

My segment, my seven ex-wives used to say I had no backbone. So maybe, I don't know, I could finally make them happy. I don't know. That's a joke. His five ex-wives just to say I had no backbone, so maybe, I don't know, I could finally make them happy. I don't know. That's a joke. His five ex-wives just didn't understand him. That's really what I keep telling the judge every time in family court. I don't know. I've never been married. But that's what makes it funny. So this is really cool.

This is really innovative stuff. Is it being widely used now, or is it still something where more people need to ask their doctors about it, or we need more doctors to be educated about it? How widely in use is it still something where more people need to ask their doctors about it or we need more doctors to be educated about it? How widely in use is it? Yeah, so we got our FDA approval in late 2015 and started our commercialization here in the U.S. mid-2016. And we've had a just extraordinary sort of ramp in usage since then. So there's a really large market with lots and lots of competitive technologies. One of the huge advantages we have is not only that the technology works extraordinarily well, but we have outstanding clinical data demonstrating that it works.

Most of the products that we're competing with really don't have any data. And so it's a function of a couple of the things that you said. One is our continuing to educate our potential surgeon customers that this provides clinical benefits for their patients, making their patients better, making their practice better, et cetera, as well as educating the hospital systems that they work in, the insurance companies that pay for it, that in addition to this clinical data showing safety and efficacy, we also have really important medical economic data showing that it in fact saves the insurance company money if the surgeon chooses to use this technology versus the alternatives. I think most of us are aware that our medical and healthcare

system is under a terrible amount of financial stress. COVID has not really been helpful in that regard. And so individual hospitals and hospital systems have fixed reimbursement that they're working under, and they need to remain profitable to keep their doors open to continue servicing and taking care of patients. And so we are in a unique position that we can help them with that. We can minimize sort of some of their costs and expense while allowing them to provide best-in-class care for their patients. That's awesome. That's awesome. So how long, if you get to back growing, do most fusion, when they do these, you do that fusion thing without your product, do they have the growth regeneration possibilities or is it just no?

So the goal, so the surgeons, they do their decompression to fix the neurological problem. Did they have the growth regeneration possibilities, or is it just no? So the goal, so the surgeons, they do their decompression to fix the neurological problem. They now have this instability that they have to address. So they fix that temporarily with the use of hardware, metal, plastic, et cetera. But eventually those things are going to break. And the only way for that to be sustainable long-term is to get this regeneration of bone to lead to a fusion of the spine, taking those two vertebrae and making them into one. So that's the goal of all of the technologies in this. Certainly, as you'd imagine, some work better than others, some work faster than others,

and some we just simply don't know because there really isn't any evidence. So one of the great things about our technology is the fusion rates that we have seen are as good or better than anything that's been seen with other technologies before. And we also have a fantastic safety profile. So if you have a product that's really effective, it works really well, but it has all kinds of side effects, that's not really ideal. And we don't have that issue. So tremendous efficacy, dynamite safety profile, and it's cost-effective for the hospital and saves the insurance company money versus some of the alternatives. That is awesome. That is awesome. The science in future and the future is really amazing.

Sometimes they say we're the last generation to die. Is this something where, so they don't have to go in and replace my parts lately. Like I don't have to go in for maintenance service then if I, if we use this. Yeah. So we're on the, people have been using the phrase regenerative medicine for a long time. So the whole concept there, instead of replacing a part with a plastic or metal or something, create an environment and leverage the biology that's native there to get the patient to regenerate that tissue, that structure, whatever. And so bone is one of those tissues where I think we're a little further along in that regard than some others. So our technology, I think, is a big leap forward in being able to regenerate bone, leveraging native biology. We're not trying to fool mother nature. We're just trying to use

what's there and make it work as well as possible. The opportunities to expand this sort of way of thinking and way of approaching disease states, I think is unlimited. It's largely just a function of picking and choosing and inching the technology forward as we continue to learn more and be able to provide better outcomes for patients. And so you guys, your product is the product called iFactor. I'm looking at the website right now. Yes. So our core technology is iFactor. So we actually have a couple of different generation versions of the product. So in the United States, we sell iFactor putty. Outside of the US, we've actually been on the market for an awful lot longer. So launched in 2016 in the U.S. We launched initially in Europe in 2008. So we have a huge amount of

commercial and clinical experience. Somewhere well north of 150,000 patients have now been treated with this technology. We have developed a next generation version of the technology, which we're currently calling P15L. We're about to finish an FDA clinical trial with that for use in the lumbar spine in the low back. So we're going to conclude enrollment. We're going to stop doing surgeries in that study within the next several months. We have to follow those patients all for two years for the final outcome, submit that to the FDA through what's called a pre-market approval process. Once that's approved, we'll then be able to sell that for use in the lumbar spine.

We're not sure what that trade name is going to be in the US, but we also recently had that approved in Canada. We're calling that iFactor Matrix. And it's a giant leap forward in terms of not just the biology. So we've improved upon the already amazing biology of iFactor, but we've really improved the interoperative user experience that the surgeon experiences. Wow. That's pretty freaking awesome. This is great if you could regrow parts that are failing. It looks like amino acid and collagen are part of it. Is that how it works? Yeah. So it's a synthetic replicate of a segment of native type one collagen. And so I know there's probably a lot of folks in the audience who don't heard of collagen and may not know a ton about what it is, but so collagen is the most ubiquitous biomolecule in our bodies. So all of our

connective tissues are made up of multiple different things, but the primary constituent is collagen type one. So this collagen is a triple helical molecule. It's a really long molecule. It provides the elasticity in skin and some other tissues that have elasticity. In bone, it provides its ability to be able to be strong in bending, torsion, shear, compression, flexion, extension, is how it's combined with the mineral component. But this is a long biomolecule made up of thousands and thousands of amino acids. The segment of that collagen where cells attach is this little tiny segment of 15 amino acids. And so you can basically just stitch those together in the right order in a test tube and make this P15 peptide. So that's a secret sauce. That's the drug component of I-factor and P15L. And it's that peptide that causes cells to be attract, attach, and activate

and turns on this native biology process for bone regeneration. Oh, wow. That is crazy, man. That is amazing what you can take and do with stuff these days, man. Just amazing. So what have we covered? What have we touched on about your guys' product and how and what you do? Is this something patients should be asking for or you just need more doctors to know about it? Yeah, I think it's a combination of the two. I think we're making tremendous strides in that there are approximately 5,000 spine surgeons in the United States. When we first launched the product, none of them have ever heard of it. It took us a while to start developing some brand equity. A surgeon's job is really complicated and risky in a lot of ways. And so they're somewhat

risk averse to trying new products because the downstream effects of something going badly are terrible, both for their patient as well as for their practice. And as you would imagine, as you would hope, frankly, they're pretty conservative in adopting new technology. So what we see happening is they're very excited about the science that we have, about the tremendous clinical evidence that we have and the medical economic evidence we have for eye factor. That usually gets them interested in trying the product. Generally, they will try it in a couple of patients, cautiously optimistic. Then they'll wait a little while until those patients come back and they start seeing what their x-rays look like, and they see, lo and behold,

they are seeing rapid quality fusions happening without many side effects, they'll then normally start expanding their use of it more frequent for different patient populations, etc. And then over time, they realize that this is just the best option that's available to them. Eventually, they start telling their friends. So no matter how hard we work at trying to educate surgeons about this technology, there's nothing more powerful than one of their peers, someone that they trained with, or someone that they respect saying that they've been using this technology for several years, and they're seeing great results. We're starting to see that now. So certainly if any patient is to ask their surgeon about it, if they're not familiar, if that just urges them to start doing some research and looking into it, that would obviously be to everybody's benefit in the long run. As we certainly believe this is the best patient option available to get fast, rapid healing with no side effects.

I think more and more surgeons are starting to see that's in fact the case in their own practice. That'd be awesome, wouldn't it? That'd be awesome. This has been pretty insightful, man. It's amazing what people can do to do this. Anything else you want to touch on before we go out? No, I think we're in an interesting stage as a company. I joined a little bit over eight and a half years ago. We were pre-commercial in the US. We had a little bit of revenue outside of the U.S. And so we've come an awful long way building a commercial infrastructure here. Enormous. We're a private company, so I'm not going to talk about our revenue production.

But that progress has been amazing. We developed the next generation version of the product that we're getting ready to wrap up a clinical study on. So we still got a lot of wood to chop there. That's the late 2024 approval and commercialization. But over the next year and a half to two years, we are likely going to be seeking additional funding in the public markets. And so at some point, we may switch from being a private company to a public company that people can invest in. Obviously, if we go through that transition, we'll be able to share a lot more information on a periodic reporting basis.

A lot of exciting things going on here, a lot more and better to come. And certainly more than happy to talk about it with anybody who's interested in these sorts of things. That's awesome, man. This gives me hope. I think I damaged one of my lower discs back in the day. And every now and then it's fine. But if I wrench it or I pull it weird, it starts acting up and takes a couple of days to go back. But I think it was from a move like 20 years ago, but I'm always worried about the degeneration. And I guess we start losing collagen as we get older too. And that's an issue as well, isn't it? Yeah. Our bodies are only built to last for so long.

I think there are a lot of things that we can do to try to extend that, but those have limitations, at least for now. Darn it. I thought this thing would run forever. There are folks working on that. I want my money back. Somebody find my receipt. I want my money back. Somebody find my receipt. No, I think it's just wonderful how hot this is. And you're one of only two things like this in the market that can do this. Correct. So there's only true drug device combination products approved for use in the spine, and they're both approved as... So one of the options that surgeons have when they're doing a spinal fusion is to harvest the patient's own bone from somewhere

else and then put it into the site where they're using it. So that's always messy, isn't it? Yeah. In the old days, they used to go to the patient's pelvis and they would go inside of the pelvis and scoop out a lot of bone. And it doesn't seem like a big surprise that can be painful. So they've largely moved away from doing that. And they're normally taking it from adjacent parts of the spine where pieces of bone are being removed. But most of the products that are on the market are just mixed with autograft. So there's an extender. Our product and the other drug device combination product can actually replace autograft and be used by themselves. So they're the only two products that have been shown to be able to be used in that way. Believe it or not, there are

over 400 synthetic bone grafts approved for use in the United States or cleared rather. And there are a whole bunch of products based on cadaver bone that's very carefully processed to try to reduce the disease transmission potential. But there are hundreds of those as well. Those categories of products are really just autographed extenders. There's not much evidence regarding their efficacy. So we stand in unique company among these two products that are FDA approved on the basis of a large prospective human studies proven to be safe and effective and as autographed extenders. That's pretty amazing. That's pretty amazing. So Jeff, give us your plugs as we go out so that

people can look you up on the interwebs and find out more about you guys. Yeah, so please check out our company website, seropedics.com. There are links on there to additional education materials. In particular, I think the manufacturing process for our technology I think is pretty fun and exciting. We put together just a short two-minute video where you can see our team actually manufacturing the product and learn a little bit more about how this technology is brought together so that it can get into the operating room and help surgeons help patients get better. There you go. There you go. Guys, check it out. This is pretty enlightening and it gives me some hope for the future because I'm just getting older and more broken down. I need to do everything I can to sustain. We may be calling you

in the future, Jeff. I have my back search and call you. I hope you won't need us, but we'll be here when you do. There you go. There you go. All right, guys, we'll check it out. Go to youtube.com, Fortress Chris Voss to see the video version of this. Go to goodreads.com, Fortress Chris Voss. You can also go to all of our groups on Facebook, LinkedIn, Twitter, Instagram, and everyone else. Be good to each other and we'll see you guys next time.