IPO Corner: A Non-Addictive Cure For Pain

Last week, the U.S. House of Representatives passed the $1.7 trillion omnibus spending package, which contains the Nation (NOPAIN) Act (H.R. 3259/S. 586) to expand access to FDA-approved non-opioid pain management options in certain settings. This to help combat issues facing the nation regarding increasing levels of addiction to certain therapies for the treatment of things like pain, depression, and other underlying issues that require possibly addictive therapies in the first place.

While the legislation has turned out to be a bit controversial, we’re not particularly interested in commenting one way or another. Rather, we’d like to point out that a problem big enough to warrant legislative intervention surely warrants that markets meet the problem with solutions. We think it’s an opportune time to have the conversation, as we’re seeing a trend in people organically beginning to search for more people-friendly therapy alternatives without being prompted.

Dangerous Molecules

From what we can tell… people just seem a bit sick of the drama that comes with their drugs, so they are seeking out alternatives. Life is a bit harder these days, people aren’t looking for the added stress of addiction to add to that if alternatives are available. And maybe it was inevitable in the year 2022… but we’ve found a surprising alternative to which people are turning: neurostimulation devices.

Neurostimulation devices are able to deliver electrical stimulation to specific parts of the brain to treat illnesses like movement disorders, chronic pain, and even depression and anxiety. The global market is exploding and is expected to go from a valuation of $4.79 billion last year to a whopping $50.7 billion by 2030. It’s attractive to patients because it’s low to no risk for addiction, especially compared to other available treatments.

There are more and less invasive examples of the technology, so we’ll focus on a non-invasive application called transcranial magnetic stimulation (TMS), which is used to improve symptoms of depression. It’s called TMS because it involves repetitive magnetic pulses. These pulses come from an electromagnetic coil placed against the scalp near the forehead. While this sounds alarming, rest assured it isn’t. This system painlessly delivers a pulse that stimulates nerve cells in the brain.

We expect to see a continued uptick in interest in neurostimulation devices. Certain factors are driving this uptick in conjunction with patient-driven alternative treatment seeking. Factors such as an increase in incidence of neurological disorders due to current global health conditions. Additionally, the wide range of applications possibilities means the space is conducive to further innovation.

Deals To Watch

Today we’ll be looking at Nexalin Technology, Inc. and Stemdia Medical.

Nexalin Technology (NXL) designs and sells non-invasive, undetectable neurostimulation products to help aid mental health, without adverse side effects or risk of addiction. Nexalin has several product offerings, including bioelectronic medical technology for the treatment of anxiety and insomnia, which offers patient’s relief without the need for drugs or psychotherapy.

In September, the California-based firm began trading shares of common stock and warrants on the Nasdaq. 2,315,000 units were offered, with each common stock sold together with one warrant to purchase one share of common stock with an exercise price of $4.15 per share at a combined offering price of $4.15. Down here at $0.75 you can see how it’s gone . . . but the IPO raised $9.6 million. Maxim Group LLC acted as sole book-running manager, and Warshaw Burstein, LLP as legal counsel.

Stimdia Medical is working to solve problems for patients struggling with the myriad of respiratory viruses we’re seeing in our world today. Specifically, the company is working on technology to help get people off ventilators. Earlier this summer, the company was able to raise $16 million via a Series B financing round led by Solas Bioventures and contributed to by new strategic partners and existing investors Draper Triangle Ventures.

Based in Minneapolis, Stimdia has designed what they call the pdSTIM system. This system is for high-risk patients, and uses minimally invasive neurostimulation to awaken and recondition the diaphragm. This allows patients suffering from ventilator-induced diaphragmatic dysfunction (VIDD) to wean off machines. The technology was developed in collaboration with the University of Minnesota in its early stages, allowing for seed stage investment and a successfully completed first-in-human clinical study.

The market for neurostimulation devices is wide open, and we’re seeing interest skyrocket. Given that the treatment has shown to be effective for so many things, including Epilepsy, chronic pain, Parkinson’s Disease, depression, migraines, and much more, it’s not surprising. From hand-held devices that can be used in public to implantable devices for more complicated illnesses, these devices are being embraced… and we’ll be watching closely to see what develops. Come back next week, see you then!