From Circuit Boards to Brainwaves

Shriram Raghunathan is an inspiring figure in the medtech space, known for his proficient engineering know-how and deep understanding of neuroscience.

He started his journey as an electrical engineer, designing circuits for cell phones. However, his love for music and fascination with the brain's perception of it steered him towards neuroengineering.  Drawing a parallel between neurons and circuits (they both essentially switch on and off), Shri embarked on a new journey, attempting to understand the brain's complex nature. 

Although the brain proved to be much more complex than Shri presumed, he skillfully applied his background in electrical engineering to the neuroscience space, designing implantable devices for seizure detection and suppression in mice and rats.

As his career progressed, he moved to designing Vagus nerve stimulators for patients with epilepsy. However, Shri grappled with the reality that most patients could only access these life-changing therapies after exhausting all medication options due to their risky and invasive nature. This inconvenience sparked his interest in the consumer aspect of medtech, leading him to focus his work on establishing medical devices as accessible alternatives to pharmaceutical options.

This desire led Shri to the Stanford Biodesign Fellowship, a year-long immersion into problem-solving alongside engineers, business professionals, and doctors.

During his fellowship, he gained invaluable insights into healthcare's most pressing unmet needs. For one, Shri discovered the extensive and often overlooked problem of restless leg syndrome (RLS), a neurologic disorder characterized by an overwhelming need to move the legs, commonly disrupting sleep and causing significant distress and poor quality of life. Surprised by the prevalence of RLS and the number of patients resorting to Parkinson's drugs for treatment, he saw an opportunity to develop a medical device solution for this condition.

This is how Noctrix Health was born. The venture is an early pioneer of "therapeutic wearables'', seeking to address the gap in patient care within the neurological space. Their devices have the potential to replace or augment pharmaceutical treatments, a significant step towards achieving Shri's vision of leveling the playing field between medical devices and pharmaceuticals. 

Noctrix Health’s flagship product NTX100 is based on the observation that RLS patients often find temporary relief in leg movement. The product consists of two wearable units wrapped around the common peroneal nerve located on the outside of each knee. Patients can activate the device before bedtime and adjust the calibration settings for optimal efficacy. The challenge lies in ensuring the electrical stimulation does not incite disruptive paresthesias, which could potentially disturb the patient’s sleep.

The team at Noctrix Health meticulously tweaked the device, experimenting with different waveforms and nerve targets, and succeeded in making the electrical stimulation either imperceptible or comfortable enough to allow patients to fall asleep. By selectively sending electrical stimulant waves to the afferent nerves in the lower legs, the device conveys signals to the spinal cord, simulating the sensation of active leg muscles. This 'deception' helps placate the brain, mitigating the irresistible urge to move the legs.

NTX100 is designed as a chronic in-home therapy available through a physician's prescription. The company envisages a system where patients would typically acquire the device through their sleep doctor, akin to acquiring a CPAP device for sleep apnea. As a result, the device is positioned to be used continually at home.

Following their recent FDA approval via a De Novo 510(k) application, Shri and his team are undertaking a limited launch in the United States. The next 12 months will be crucial to fine-tune the product, refine the company's capacity to service patients and clinics effectively, and establish the necessary systems for scalability. Concurrently, Noctrix Health is assembling a comprehensive reimbursement team aimed at securing insurance coverage and new reimbursement codes that would ensure broad market access and device affordability.

Key Learnings From Shri’s Experience

• In the medical device industry, need-to-have products come with much lower friction than want-to-have products. Focusing on the unmet patient needs rather than trying to create a new market for your solution will yield much better commercial results.
• Surround yourself with talented, insightful people who are not afraid to challenge your assumptions. This type of high-performing team can help you navigate risks and offer fresh ideas to drive your venture forward. 
• It is crucial to validate the scale of the problem and demonstrate your device’s capacity to solve it. This not only manifests the true value of your solution, but also paves the way for its receptions, which is key to attracting the right investors.

The Importance of Solving a Real Problem

Shri’s foundational precept is coming up with a product that solves a legitimate problem people frequently deal with. He points out: "The one thing that you absolutely cannot change is your unmet need. That's remained our North Star.” All other elements of the startup, such as team, product, or technology, can change, but the problem you aim to solve should remain consistent. 

In the medical device space, most products are necessities rather than luxuries. Shri reiterates: "We have to remember that we're in a market where things are needs, not wants. Making sure you focus and spend as much time as possible understanding that unmet need allows the rest of the operation to go smoothly." 

When you focus on solving a real problem, you inherently pave your path to success in other aspects of the business like fundraising, regulatory, and commercial. As Shri states: “A strong unmet need with a big market rarely needs a ton of publicity or hype.”

Aligning the unmet need with the relevant stakeholders is another crucial aspect that Shri emphasizes. When this happens, smoother operations are often a by-product. For example, if you can align your clinical trial outcomes with both reimbursement and regulatory requirements, that results in a lot of synergies. 

Shri also acknowledges that the early development stages may take longer as you need to find measurable ways to assess that your product is addressing the need you’ve pinpointed, but “it pays dividends on the back end” as your clinical trial outcomes match stakeholders’ needs.

As Shri emphasizes, any skilled engineering team can generate possible solutions, but the real challenge is ensuring that these solutions are targeted at the right problems. He offers a thought-provoking observation: "It's mostly, are you solving the right problem? Are you framing the problem in a manner that the solution actually makes sense?"

Furthermore, Shri also addresses the concept of maintaining focus on your mission and exercising the discretion to say 'no.' Startups, particularly in the medical device space, do not have the luxury of frequent pivots. Making the selection of must-haves versus nice-to-haves is key.

Build a Team That Isn’t Afraid to Challenge Assumptions

One of the most crucial lessons that echoes amongst successful medtech entrepreneurs is assembling and nurturing a high-performing team and a supportive community. Shri says: ”I was fortunate to have a lot of people around, some of whom I work with today, including my founding team, as well as mentors and advisors that offered free advice.” This isn't simply about creating a team for the sake of it, but curating an environment where every individual can contribute with their unique perspectives, enriching the overall fabric of your startup.

A strong and supportive team can act as a bulwark against the myriad of challenges and risks that come with entrepreneurship. “You don't want to be surrounded by ‘yes’ men. I get scared when that happens because I know I'm not the sharpest knife in that toolbox. And if everybody's heads are nodding as I'm speaking, then something's wrong,” Shri wisely suggests. 

Beyond building a team, it is essential to foster a culture of trust and open communication. “Having people who are not just experienced but also frank, honest, and willing to have the hard conversations upfront with you pays dividends. You build that trust over time, and you wind up being much more productive as a team.” A good team does more than just execute; it challenges assumptions, broadens perspectives, and fosters growth.

You also need to give your team members the freedom to excel in their areas of expertise. Shri says: "You can't just surround yourself with people and then tell them what to do. You have to let them do what they're good at, which means setting your ego to the side, rolling up your sleeves, shutting up, and helping."

Broadening the scope beyond the immediate team, Shri also underlines the importance of cultivating relationships with a wider community: "In hindsight, I would have just said, have more people, more relationships, more mentors, around you. Reach out to more people and ask for help." A network of trusted peers can become invaluable sources of advice and support, especially during the tumultuous startup journey.

Accelerating Fundraising With an FDA Breakthrough Designation

In an ever-competitive market, fundraising can often be a formidable hurdle for start-ups. Shri revealed how his company leveraged FDA breakthrough designation to bolster its funding strategies. 

For Shri, a successful process begins with identifying the right investors. As he states: "It's not just about the check, but about the beliefs behind that check and what else they can do. Are you actually seeing eye to eye with those people?" The investor’s belief in the business mission is just as important as their monetary contributions.

Validating the problem and its magnitude is a cornerstone of the pitching process when looking for investors, too. Shri shares: "When we pitch, we really take time to focus on that first piece, which is, here's the problem, here's how big of a problem this is, and here's how we validated that this is a big problem." 

Securing the basics builds credibility and forms a bedrock for your future fundraising strategies. In Shri’s case, Noctrix Health shot for — and hit — attaining breakthrough designation, and it really influenced the perception of their therapy in the eyes of potential investors, serving as a reassurance on the importance of their treatment. Shri shares: “It was a great validation for us and the RLS community in general when the FDA acknowledged that this is a chronic, severe, and irreversibly debilitating disease, and this therapy has the promise to address that.”

Despite the high number of breakthrough designations granted, Shri emphasized the scarcity of devices that eventually make it to the market: “There have only been about 60 devices that have come out on the other side of that funnel.” A stark statistic underscoring the extraordinary nature of Shri and his team’s achievement.

The breakthrough designation path was also beneficial in terms of engaging with the FDA early on. Shri explains: “Putting my entrepreneur hat on, I think it's a great channel, a great pathway to engage the FDA early. And the agency has been fantastic with our requests for sprint meetings.”