How NeuroOne looks to provide a comprehensive toolbox for neurosurgeons ??

I recently had a chat with Dave Rosa , President and CEO of NeuroOne Medical Technologies Corporation (NASDAQ: NMTC) . They are looking to provide an all-in-one solution capable of monitoring electrical activity, performing tissue ablation, and also providing stimulation for pain management.

It was a super interesting conversation hearing about their use of thin film electrode technology and their bold move to take the company public before having a completed design for their technology. Not for the faint of heart.....

Let's get into it!

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Can you tell me about your background and your journey to where you are today?

"Sure. My college degrees were more on the engineering side, but I quickly realized that I didn't like engineering all that much, and I wasn't very good at it. However, I was always intrigued by the medical device industry. I believe in telling my children to do what they are passionate about. Don't pursue something just for the money; pursue what you love because you will likely excel at it. That was my passion.

After a few years in an engineering role for a large company, I took my first job in the medical device industry at twenty-seven years old. I'm sixty years old now, so I've spent my entire career in medical devices and have really loved it.

I started out, like most people, working for larger medical device companies. Later, I took a few opportunities with smaller companies because I felt I could have a greater impact. That’s what I gravitated towards. Out of those thirty-four years, I've spent about half my time, or more, as CEO of either startup companies or small medical device companies."

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What is it about neurotech that's attracted you to our industry??

"If you look at my career in medical devices, I've worked in many different areas: urology, orthopedics, wound care, skin care, interventional cardiology, cardiac surgery, heart failure, cardiology, and now the neuro field. I probably spent most of my career in the cardiovascular space and felt that after about fifteen to twenty years in that space, it had really matured. When I got involved in 1995, interventional cardiology was relatively new. Now, it is well developed, and the amount of innovation is nowhere near what it was when I first got involved.

The neuro space came up unexpectedly. I was approached by the cofounders of NeuroOne. While doing my diligence, I had the opportunity to talk with some physicians and I observed how they did things and thought it was quite archaic. They were removing the top part of patients' skulls to do brain surgery. I asked them why they wouldn't use a laser or much smaller devices to make smaller holes in the brain instead of removing the top part of the skull.

When I explained the approach in the cardiovascular world to a prominent neurosurgeon, he said they were about twenty to thirty years behind. This reminded me of when I got involved in the cardiovascular space and how young and immature it was, with so much room for growth. I felt the same way about the neuro field. The room for growth and innovation was exciting.

Additionally, I often get involved in areas with a family connection. While Alzheimer's isn't directly fatal, it contributed to my mom's death. We have a history of Alzheimer's, especially in women, in my family. I have a daughter, and I really wanted to contribute something back to this space."

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Can you tell me about NeuroOne? What products do you develop, what problems do you solve, and how do they work?

"Let me address the areas we're focusing on in terms of solving problems. The big opportunities for our technology, and any technology in this space, are for neurovascular and neurological conditions like epilepsy, Parkinson's disease, any motor-related or brain-related conditions, and also pain management. This can involve treating or stimulating the brain, spinal cord, or other peripheral areas in the body.

Our technology is referred to as thin-film electrode technology. What sets us apart from other companies is our goal to develop a platform capable of multiple functions. The first function is monitoring or recording electrical activity wherever these devices are placed. There are competitive devices that do this, but what sets us apart is our recent FDA clearance to use the same device for both diagnostic indications and tissue ablation.

In treating epilepsy, for example, doctors use diagnostic devices to find problem areas in the brain. Typically, the patient is sent home and brought back later for tissue ablation. Our device can perform both functions with a single device, eliminating the need to send the patient home or redrill holes into the skull. The goal is to complete everything in one hospitalization and one surgery.

The third function, after monitoring and ablation, is stimulation, which is crucial for pain management. We want to use the same device for all these purposes. This becomes especially important in advanced conditions like paralysis, where stimulating and recording tissue is necessary. While ablation may not be a factor in these cases, communication with a remote computer-based system is.

In summary, we aim to have a device capable of recording, monitoring, and stimulating. So far, we've successfully obtained FDA clearance for devices that perform at least two of these functions, and we're working on the third."

From your experience, how has it been working with the FDA and how have you found the process of getting approval?

"In the old days, it was pretty well understood that if you were filing a 510(k), it was about a four-month process. However, the FDA has clearly changed some of the guidance they used in the past, at times leading to longer lead times for 510(k) clearances.

Recently, our combination device received clearance in a five-month span. It was a lengthy submission, and we were happy to have the process done in five months.

In the neuro space, especially if artificial intelligence is part of your submission, it can take years instead of months to get systems approved. I've partnered with and worked with a few companies, and this has been their experience.

Today, we have three FDA clearances for our platform, and we will be submitting for more clearances for other applications, hopefully this year and beyond."

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So, what are you working on at the moment? And what does the next twelve months look like for you?

"Currently, we are doing a limited launch of our ablation system, which can both monitor and ablate brain tissue. We are also submitting additional applications to the FDA to leverage the hardware, particularly the generator used for ablation, for other parts of the body.

One area we’re working on is spinal cord stimulation to treat back pain. Existing systems use a very small device threaded through a needle for narrow stimulation. Our approach uses a film—a much wider device—inserted through the same needle for broader spinal stimulation. We’ve made great progress and aim to finalize the design in the next six months. There’s significant enthusiasm among pain specialists with this technology.

Additionally, I’m personally excited about drug delivery. Our system can locate problem areas in the brain and deliver gene therapy, drugs, or cell-based therapies directly to the site while monitoring the effects. I believe this approach will be the future of treating neurological conditions. Patients would likely prefer less invasive options that don't involve burning brain tissue or implanting permanent devices.

We’re in discussions with a company that has a novel gene therapy device for epilepsy and are negotiating potential collaborations. We're also initiating talks with other companies developing similar gene or cell-based technologies. Our platform could be used in early therapy development to test effects in animal models before moving to expensive and time-consuming human trials.

Overall, we aim to offer a comprehensive toolbox for neurosurgeons, including our ablation system, drug delivery system, and eventually a stimulation system. This would enable a full range of treatment options, which I believe is the future for these conditions."

From an investment perspective, what has been your approach to raising funds?

"If you did a poll of a thousand small or micro-cap public companies or even startup companies and asked them what their number one challenge is, I'm assuming close to 100% would say financing. The financial markets in the US have not been kind to small, micro-cap, or startup companies in the last two years. Despite projections that things would improve, the market remains very challenging.

Early on, as a plan B, we decided to take the company public even before having a completed design for our technology. It's not for the faint of heart; it's a very challenging process, and probably fewer people are attempting it today. However, all financial markets are challenging. People often ask why we went public. The short answer is that going public provides greater access to capital than the venture world.

One aspect I've always appreciated about the public market versus the venture world is the speed of decisions. In the venture world, you might hear that a venture capital company is interested but wants you to reach certain milestones first. Even after achieving those milestones, they might still decline. In the public world, you typically get a quick yes or no, which saves a lot of time.

We went public and have done a number of public financings. We also raised funding via licensing fees with Zimmer Biomet, our worldwide distribution partner. We chose to partner with a more established company to validate our technology and minimize expenses by utilizing their salesforce. We have raised over $65 million."

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What advice would you give to leaders who are at the beginning of their med device startup journey?

"I've learned a lot from making mistakes and facing numerous challenges. One piece of advice that's really important is to make sure you take some time away from the job. These jobs can demand 24/7 attention, but it's not healthy to work that many hours. You need some time away. It's a grind, and every day you're going to face challenges. Don't get too high or too low. Early in my career, I'd get excited about a positive development, only to be hit with an unexpected challenge the next day. Try to maintain an even keel and stay focused on the end goal.

Having a strong support network is critical. You need people to bounce ideas off of, especially on tough days. When you're new to this type of role, having that support is essential.

Another crucial piece of advice is about personnel. This may sound like common sense, but it’s often overlooked. Finding the right people is critical — not just employees, but also board members. If you don't have the right employees, it's obvious you're probably not going to be successful. But if you don't have the right board, and they aren't supportive, it can be equally devastating.

To sum up this point, we struggled for four years and almost shut the company down because of manufacturing issues. We would get great results, and then, just as we were getting ready to submit to the FDA, nothing worked despite doing everything the same. I hired someone through my network who had experience in the neuro space. This person had worked at Neuralink, and within ten days, he resolved the issue we had been struggling with for four years.

In the neuro space, which is still very immature, finding people who have lived through mistakes and solved them is critical. We’re talking about the brain, an area where even highly experienced physicians at renowned medical institutions admit we still don’t fully understand. Finding people with experience in this space and having the right board members is crucial to a company’s success. We wouldn't be where we are without that.

Lastly, nothing is more important than God and your family. It's easy to get consumed by these jobs, but don't lose focus on what's truly important in life."

I really enjoyed the conversation with Dave. Developing a platform with an ablation, drug delivery and a stimulation system will be a very powerful tool and I am looking forward to seeing how things develop over the next year or two.

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