Yuval Mandelbaum, Discure Technologies - Spotlight Interview | LSI USA ‘23

Transcription

Nick Talamantes  0:15  

Yuval, thank you for joining me in the studio.

Yuval Mandelbaum  0:17  

Thanks for having me, Nick.

Nick Talamantes  0:19  

Why don't you tell me a little bit about the Discure Technologies?

Yuval Mandelbaum  0:21  

Sure. So this was really quite a unique technology, we've developed a minimally invasive implant and really a unique way to treat and reverse degenerative disc disease, which is truly one of the largest unmet needs out there today. And because the system is minimally invasive, and really allows us to come in quite early at the same stage as opioids, before patients start that vicious cycle, and give us gives us an opportunity to really reduce the use of opioids worldwide and eliminate the need for invasive back surgery. So that's a lofty goal, but it's one that I'm personally happy to wake up in the morning and pursue and really provide these patients potentially a better way to treat and not just reduce pain, but really heal the disk and restore function and get back to their normal life.

Nick Talamantes  1:10  

So this sounds almost like a bio electronic that you're working with, then how does it work?

Yuval Mandelbaum  1:14  

So it's indeed about electronic. And, again, it's, it's a bit complex, I'll give kind of the short, the short overview of it. When we look at an intervertebral disk, this is a very large avascular organ. So you don't have any blood supply coming directly in. But rather, there are cells inside of the disk that secrete a negatively charged protein. And that creates a potential an electric potential differential between the inside of the disk and the outside environment. And so the disk is able to draw fluid and nutrients and oxygen from the outside and word giving the disk its volume and the cells are nourishment. And the disease state, these cells die out. And so there's nothing to create that negative charge, the disk becomes a neutral environment. And so there's less fluid coming in leading to mechanical payments that this deflates. And there's less suspension and there's less stability to the spine. But perhaps more importantly, with respect to the pain is that there's less inflow of nutrients and oxygen coming in. So these cells are in a stressed environment producing lactic acids creating burn. And we also have less inflow, so there's less outflow of fluid. So you can accumulation of metabolites and cytokines, toxicity and inflammation, until ultimately, this upgrade is a vicious cycle. And we see that the disc dries up and collapses. So we understood that's really based on the literature. And we understood that the problem here isn't that pumping function. And what we've developed is a proprietary electrode that we inject under local anesthesia in an outpatient setting, into the center of the disc. It's connected to a pretty standard implantable pulse generator or IPG, just quite a bit smaller than typical neuromodulation devices. And what that allows us to accomplish is really recreate and control that natural negative charge. So you can actively control with a dose response the inflow of fluid, reinflating the disk and relieving the mechanical pain, but also controlling the inflow of nutrients and oxygen, providing a better environment for the cells, allowing them to function better stop producing lactic acid and repopulate as well as accelerate the healing of the tissue of the disc, really allowing us to reverse that degenerative process.

Nick Talamantes  3:32  

It's incredible. So this technology can come in much earlier than, you know, surgery, spinal stabilization, is this going to completely eliminate the need for in theory, those other surgical techniques?

Yuval Mandelbaum  3:46  

Oh, yeah, it's going to be the only product out there and we're going to take over the orthopedics market. Oh, no, no, it's, it's a complex disease of what you generally see here and the continuum of care is that these patients at the early stages they go to their GP, with a complaint about back pain, they don't know what it is yet. They take get a prescription for some low grade, low grade pain medication, that doesn't do anything for the degeneration. So continues ultimately, to come back to their physician, they get sent out typically, to a neurologist or to pain management physician, who also don't have too many available options. It's mostly firstly, send them out to physiotherapy. If they're compliant, that may delay it a little bit to non compliant, which often happens, sadly, the next step is typically acute treatment, like steroid injection. And after that, there's not too much. It's used to be just a lot of opioid prescriptions. Now, they're cracking down on that a little bit more, and physicians rightfully become a bit averse prescribing that so they're just setting these patients back home, in pain without any real solution. And they just wait out a very significant gap in that timeline and continuum of care until they're eligible for those latest states treatments like fusion where you take out the disc and fuse together the vertebrae with rods and plates, which is done at an alarming amount in the US today is about 700,000 operations per year. And there's that there's disc replacement, as you mentioned, and there's spinal cord stem. And, you know, it's neither are really the best solutions that you could hope for. Because A, they're highly invasive, but B, they don't really solve the problem. It's all symptom modifying, and not disease modifying. So you don't want to just mask the symptoms, which helps, to an extent and in a certain portion of these patients. So that's really what drew us into this field. And we wanted to solve that problem, not just mask the symptoms, but really heal the disk, while reducing the pain and restoring function to the disk into the patient. And being minimally invasive, really allows us to come in quite a bit earlier, before those patients go on that opioid cycle. And potentially if we can, indeed, as we have shown, and a vast number of preclinical studies that we've held, really worldwide with leading institutions from UCSF in California through Toledo, Ohio, Colorado University, burn University in Switzerland, and in hospitals in Israel, we've been able to show that, indeed, we don't only reduce the pain, but we stop the degeneration progression. And we reverse that process. And we've been able to show that we move the disc from a late stage grade four, back to a grade one and a healthy disc.

Nick Talamantes  6:36  

Is this something once the disc is reverted back to its healthy state can be reversed? Are patients then able to live without the device implanted? Or is this a continuous device that they're going to need to keep them planted and maintained throughout their life?

Yuval Mandelbaum  6:51  

It's a good question. It depends on the etiology. I always like when it depends as as a response. But it does depend it depends on what the cause of degeneration was. So if we're looking at Trauma cause where there was some trauma that caused the gap or a fissure in the disk, then in those cases, we see that following a short relatively short period of treatment, we both restore the cell population and heal that tissue and heal that Fissure or gap that has caused that degeneration degenerative cycle. And in those cases, we can remove the system after a short amount, a short period of treatment. However, in about 80% of cases, this is age related and a very slow degeneration process. And in those cases, even if we do restore the disc height, restore the cell population, and restore the health of the disc. Our hypothesis at this point is that if we turn off the system for a prolonged period of time or take it out, degeneration would ultimately creep back in whether that's over months over years, because this is a degenerative process. But the idea for these patients would be to keep the system in planted long term, we could do boost therapy. So just you know, once this gets to a certain health state to prolong the periods of between treatment. However, it's not necessarily that that really has merit because patients don't feel the treatment, there's no sensation, there's no real risk of overtreatment. So you could just as well probably just continue doing that the same duty cycle that we use during the during the regular protocol. Because what we're really trying to do is basically follow the nature. So in a healthy disk, you have you have inflow of fluid and nutrients during the night when we're when a person is horizontal, and there's less gravitational pressure. And then during the daytime when we walk around, and there's more gravitation as we stand up, about 25% of the disk volume is secreted out. And that's the way that the disk gets rid of the metabolism byproducts and everything that has been accumulating, because it doesn't have blood supply access to blood supply. So that's how the cells remove those metabolites. And then those 25% Come back during the night and go back out again during the day. So with a system, we turn on the system during the nighttime, and then we turn it off, basically opening the circuit during the day allowing the fluid to be expelled from the disk along with lactic acid and metabolites. To really that fluid dynamic is crucial, probably as important to flush out the contents of the disk as it is to bring in the nutrients and oxygen. So as we're just following the nature and there's no sensation. Like you could argue that you could just continue doing that same treatment over the long term.

Nick Talamantes  9:51  

You mentioned you're a preclinical company. What are you guys trying to do right now? I'm gonna guess raise money

Yuval Mandelbaum  9:57  

How'd you figure that out. 

Nick Talamantes  10:00  

You know, I've been around a little bit. What are you guys trying to do with that money that you're seeking to raise?

Yuval Mandelbaum  10:07  

Sure. So first off, I think as a startup, you're always raising to some extent, you know, it's, it's always out there in the in the options of what you're trying to obtain it every pretty much every single point in time. Startups are kind of, they're cash intensive at times, although we have been able to be extremely capital efficient. To this point, we've spent just under $3 million to complete 15 studies, including two large animal studies in sheep in Colorado and pigs and Odessa Hospital in Jerusalem, as well as a number of bioreactor studies with fresh human cadaver disk and really almost any large animal disk, as well as build a clinical grade system in not too far from here in the Bay Area, with the manufacturing side. So we've been capital efficient, and we intend to continue being capital efficient throughout our next stages. So the current fundraising we've raised last year and oversubscribed round that was led by two hospital networks, both on the East Coast, which were terrific partners, so far, really great deal of value coming in beyond the funding from those hospital networks, as well as a few family offices and VCs from the US, Europe and Israel, joining our existing investors in J&J. And now we're raising a Series A of $8 million to allow us to complete the first in human study and get into our pivotal trials, we have found a lead investor for that series A, which in this market environment is, is something that I think we're lucky to say we're able to do. And as always a crucial part of raising funds, getting that right lead investor in place getting the terms that are standard and are acceptable by the market. And we have still a little bit open for the series A before we can complete it, about two and a half million out of the eight are still open. So I'm currently looking to accomplish that. And then the next point on the agenda is just to continue getting as fast and as cost effectively as possible to clinical data and beyond the first in human study, which is really the next step for the company and its maturity level. And it's it's maturing process.

Nick Talamantes  12:25  

So getting that remaining 2 million is a key objective, you could say of attending LSI this year?

Yuval Mandelbaum  12:27  

It is it is a big part of what we're trying to do here. But I'd say it's not the most significant part of why I'm here.

Nick Talamantes  12:41  

What is the what's the most significant reasons, it was to meet me right?

Yuval Mandelbaum  12:49  

You'd be surprised, but it's still fundraising just not for now. Like, I know, the the groups are quite well, the strategic, the VCs, the different investors. And overall, the majority of investors that are out here a little bit later stage focused, would require first inhuman data and clinical data to really go into a practical discussion about about fundraising. So but I do think it's important to build those relationships, you can't expect to go to a group like NEA and say, "Hello, I'm Yuval from Israel. And I'd really like to do to have you guys, if you're a lead investor". It just doesn't seem to work with that way you need to build that relationship, they need to get to know you need to give them status updates over time to build trust, especially coming from from a different continent and a different country, and different language. And, you know, there's trusted that needs to build, I think over time. So a big part of the reason that I'm here today is actually thinking of our next round, and continuing to maintain those relationships with the strategics and with later stage VCs, because you know, that's, that's gonna go gotta come as well. And you need to prepare for that, too.

Nick Talamantes  13:59  

That's a great forethought on your part and a fantastic playbook for maybe first year and repeat innovators that are in attendance at this event and other events as well. Yuval I want to thank you so much for stopping by the studio. It's been a pleasure learning about what you're doing at Dsicure Technologies.

Yuval Mandelbaum  14:18  

Thank you. Thank you for having me.