The increased awareness of the devastating impact of opiate addiction has increased attention towards new approaches to treating chronic pain. New over-the-counter products are entering the market and Big Pharma along with the NIH are entering the game. Glaxo SmithKline has invested $50 million to develop a new pain management treatment called “electroceuticals” (sometimes also referred to as bioelectronics), which work by attaching to nerves to read the signals from the body’s nervous system, thereby creating a targeted treatment.
This new treatment area is also generating buzz due to its minimal side effects, unlike those treatments associated with pharmaceuticals and injectables. Recently, the National Institute of Health dedicated over $250M to fund research into the mapping of our organ’s neural circuitry in a project called SPARC, or Stimulating Peripheral Activity to Relieve Conditions. This nascent market should gain from the tailwinds created by the opioid addiction crisis and the promising new technologies created by small public companies.
In the early part of this century, electricity was a primary treatment for medical ailments. Some say that the lack of revenue and profit opportunity hampered the development and its rival pharmaceuticals prevailed.
Neuromodulation, which masks pain, has continued to play a significant role in the management of pain, but the capacity to address chronic pain plus the dangers of opiates have infused new growth prospects.
Companies involved in the management of chronic pain have been quick to involve themselves in the recent shift to a new direct-to-consumer process. There are four products now on the market for OTC pain management. Two global companies Bayer (Aleve) and Sanofi (Icy-Hot) and two smaller, public companies, NeuroMetrix (Quell) and BioElectronics (ActiPatch). This market is sure to grow as the more consumers turn to opiate-free alternatives to pain management.
Adding to the reasons in support of future growth is the devastating impact of opiates themselves. This is likely to spur consumers to look to neuromodulation as a potential treatment. As a result, several companies in the space are pursuing this strategy. Below is a look at three small, public companies and their pain relief products.
Company: NeuroMetrix (NURO)
Technology: Transcutaneous electrical nerve stimulation (TENS)
NeuroMetrix has been long in the space, as it was founded as a spinoff from the Harvard-MIT Division of Health Sciences and Technology in 1996 by Shai Gonzani. The company’s market capitalization reached $400 million when its product dealing with diabetic neuropathy suffered a change in reimbursement. This diminished growth, revenues faltered and the company’s market cap is now at $30 million (fully diluted).
Despite its challenges the company appears poised to regain its value amidst the current chronic pain crisis as people recognize the dangers of addictive drugs to treat chronic pain.
NeuroMetrix recognized an opportunity to treat chronic pain with a transcutaneous electrical nerve stimulation (TENS) 24-hour wearable pain device called Quell. Quell works by delivering electricity across the intact surface of the skin to activate underlying nerves with the objective of pain relief. The technical challenge facing the company was battery life and the capacity to deliver an electric signal strong enough to deliver the results and cheap enough to be marketed straight to the consumer, thereby avoiding the cost of physicians and reimbursement.
Responses to the device have been promising, as evidenced by the 75% of users who decide to keep the device (priced at $250) after the first 60 days. Company revenues in 2016 reached $12 million, up from $7.2 in 2015.
NeuroMetrix’s chief obstacle comes in the form of the high marketing costs required to bring a consumer product to market. Advertising, although costly, is necessarily to promote the product, and the company has been running ads for Quell on TV as a result. The required investment in advertising means that the EBITDA is likely years away, but the company nevertheless recognizes the opportunity is build a long-term, sustainable business that meets a major market need. In the meantime, the company is enjoying small gains, such as their recent distribution into Best Buy and Amazon, as well as recently obtained worldwide patent coverage.
Company: BioElectronics Corp. (OTC BIEL)
Technology: Pulse Short Wave Therapy
Another noteworthy firm in the pain management space is BioElectronics. In February, the company received over- the-counter FDA clearance and are now marketing their product, the Actipatch. Testing faired very well at delivering nagging pain relief to at least one pain subject that had had little result from other attempts at troublesome pain. The device (which retails for $30) delivers 720 hours of pain relief through pulse short wave therapy.
BioElectronics was founded in 2003, and with just $2 million in sales in 2016, the company expects sales to reach $5 million this year 2017 and $20 million the following year. Bio’s share price on the OTC exchange is .00085 with 12.6 billion shares outstanding and as a pink sheet listed-company, unaudited financials. Their market capitalization is $43 million, though the company is now in the process of raising capital. Similar to NueroMetrix, Bio identifies its major barrier in obtaining capital as the high cost of marketing.
Company: ADM Tronics Unlimited
Technology: Corona Discharge
Another entrant in this space is a reformulated technology, created by ADM Tronics Unlimited. This small, publicly traded, New-Jersey based company has a long history of innovation medical devices. The company has recently been focusing its efforts on Sonotron, a non-invasive, electrotherapeutic pain modality utilizing a corona discharge output.
Sonotron was developed by the company’s founder, Dr. Alfonso DiMino. He had been studying the effects of a version of corona discharge on an industrial application, then determined that the heat from the corona discharge could be beneficial for the arthritic pain in his hand. He applied the corona to his hand and felt relief. He then embarked on deeper research into the corona discharge, leading to the Sonotron device. After successful trial results in laboratory animals and later, horses, it showed efficacy in improving arthritic pain. Human trials showed similar results.
Sonotron produces a corona discharge by use of a long wave radio frequency signal that is modulated and combined with an audio frequency wave. This combination frequency wave produces an audible and visible corona discharge – a form of electronic plasma. The corona discharge is recessed within the applicator of the Sonotron, which is then directed at the area to be treated. This allows the Sonotron’s energy to be non-invasively applied to the location of the pain, during which the patient would experience a mild warmth in the affected area.
The typical treatment regime involves a few minutes applying the Sonotron output to the painful area via five visits over two weeks’ time. The product was first available in Southeast Asia for a number of years, where it sold successfully. Approximately 200 of the $30,000 machines have been sold in Malaysia. General practitioners typically charge approximately $50.00 USD for each 10 minute treatment session. The FDA cleared the device 10 years ago when it was first developed, and the device is now being modified for approval with enhanced safety electronics features.
Background on Electroceuticals
Electroceuticals is centered on the use of miniature devices to modulate the electrical impulses in the body, thereby triggering biochemical processes traditionally as a result of biopharmaceuticals. They seek to totally replace drug therapies by inducing the body to heal itself. This could have a profound impact on the creation of new, non-invasive treatments for major illnesses like diabetes, asthma, hypertension, arthritis, pain and even cancer.
Recent developments in the area of electroceuticals involve implanting tiny devices on nerve bundles that are linked to specific organ functions, since virtually all organs are regulated through circuits made up of neurons communicating through electrical impulses. These circuits are ideal for therapeutic intervention for two reasons: (1) they comprise discrete components, meaning interconnected cells, fiber tracts and nerve bundles allow for precise, pinpointed intervention at the cause of pain and (2) their action potential patterns can easily be altered for treatment. As a result, the ability to miniaturize electronic devices as a way to stimulate nerves is the key to detecting and treating diseases.
Implanting electronic devices in the human body is nothing new. Think of the pace maker, an implant that stimulates the heart muscle, or a defibrillator. Many Parkinson’s patients today rely on deep brain stimulators to improve their quality of life, while paraplegics use sacral nerve stimulation to restore bladder control and arthritis and epilepsy patients seek treatment through vagus nerve stimulation. While the use of electroceuticals is common, many innovative companies in the space have further developed the technology to serve a variety of unmet medical needs, since devices like pacemakers and defibrillators do not target specific cells within circuits, thus limiting their scope.