Wednesday, December 3, 2008

David Hooper of Minimus Spine Talks about his new Startup Using Ozone for Spinal Disc Herniations

David Hooper of Minimus Spine Talks about His New Startup

What is your background?

I went to Case Western Reserve University and then the University of Iowa for a Ph.D. in Biomedical Engineering. My dissertation was on spinal mechanics and I was fortunate enough to have Dr. Vijay Goel as my advisor and Dr. Jim Weinstein on my review committee. I spent three years in England setting up a biomechanics lab and evaluating patients after knee reconstruction. From there I came to Austin and took a position at Spinal Concepts in 1999. That was a fantastic entrepreneurial company and we did really well. When I got there, there were about 30 people and under $10M in sales. We built the company to about $80M in sales and sold to Abbott Labs in 2003. I left Abbott in 2006 and started this later in the year. Several of the physicians and executives I worked with at Spinal Concepts have invested money in Minimus and helped get the idea off the ground.

What was your primary job?

I was Abbott Spine’s VP of Emerging Technologies. In that capacity I was responsible for our Class 3 product development (non-fusion devices) and involved in identifying technology for potential acquisition or investment. I was the company’s liaison with FDA and responsible for designing clinical trials and preparing regulatory submissions. I worked with physician investigators around the country and had a team of engineers, research monitors and data managers to execute clinical trials and regulatory specialists to participate on design teams and prepare FDA submissions.

Why is there so much activity in the spinal area?

A great deal of money has been invested in spine because these patients need devices that improve their quality of life. The market is moving towards minimally invasive surgery and non-fusion but the outcomes still aren’t as good as with hips or knees. Opportunity breeds innovation.

Many of the products are relatively inexpensive to design and build and can be sold with good margins. Over the last few years, some of the regulatory hurdles have been eased- specifically with devices known as fusion cages. Since 1996- at least four companies completed clinical trials on cages and they made a great deal of money. Many other companies tried to do clinical trials but struggled with enrolling them- so no approvals. FDA down classified cages a couple years ago from Class 3 to Class 2, meaning that clinical studies are no longer required. Since then, there is a host of companies fighting for their piece of the pie and competition is fierce.

Artificial discs have been hot because the market started turning away from using cages as stand alone devices and the idea of maintain motion is appealing. Just like cages, the first disc companies getting through FDA trials were handsomely rewarded but later entrants have struggled with enrollment. These disc devices haven’t yet met expectations because it’s debatable whether or not they actually improve patient care, they introduce new risks- and they are expensive. Products like that are going to struggle in today’s health care environment.

One recent problem in spine is that many of the new technologies look very similar to one another. There was clearly a herd mentality surrounding artificial discs. Spine still has great potential but the products that will be successful must be differentiated, have clinical data showing they really do improve patient care- and ideally- save the health care system money. Minimus hits on all these fronts and that’s what compelled me to start the company.

What exactly is your proposed technique at Minimus Spine?

We’re working on a procedure for injecting ozone gas into a herniated spinal disc. There’s a stack of peer-reviewed literature about an inch thick that describes this technique. It’s being done every day in Europe, Asia and South America. The gas oxidizes the herniation and allows it to shrink in size, relieves pressure on the nerve and provides the patient relief from pain. Contrast that to steroids. Steroids address inflammation of the nerve but do not address the herniation. That’s why patients often have multiple injections and many go on to surgery. I believe Minimus can effectively treat patients with just one injection and reduce the number of patients that progress to surgery.

Why isn’t this available in the U.S?

The main reason that this isn’t available in the U.S. is because there is no regulatory approval. It takes a significant investment to go through the FDA and the technology has needed a better business model to justify that investment. We have the model figured out and once we go through the FDA process we would be the only injection treatment available- except for steroids which don’t’ work that well and don’t have FDA approval for spinal indications.

Our device is quite different from those being used overseas. We’ve been able to make improvements that should position us well with the FDA. Some of our angel investors are clinicians in Europe and the Middle East who are already using ozone. They feel that our patent-pending designs will revolutionize the existing market- particularly once we have FDA approval.

How long does the effect of your procedure last?

One of our surgeon advisors has been tracking a group of almost 100 patients he treated in 2002. In that group, only 15% of the patients went on surgery within 5 years, which is about half of those who receive steroids. Less than 2% were given a second injection, which is much better than steroids where the average is 2.5 injections per patient. If Minimus can cut the number of injections and the number of surgeries then we’re in great position because it’s better for patients and saves money.

Do you need a new code for reimbursement code for this procedure?

No, there’s an existing code we can use. There was a product released in the 1980s called chymopapain that was used in a manner similar to what we want to do with ozone. Chymopapain is an enzyme derived from the papaya plant. The product was hugely popular but there were a small number of well-publicized adverse events that caused the product to crash. Basically, the enzyme isn’t specific to the disc material. If it leaked out of the disc or was mistakenly injected into nerves, the enzyme could dissolve the nerve and leave the patient paralyzed. There were also some people who had an allergic reaction to the protein and died. Some clinicians still use chymopapain outside the U.S. but its not available here. Not that many doctors want to take the litigation risk. None of these problems have been reported with ozone.

Is there a patent on this technique?

They started injecting ozone into herniated discs in Italy over 15 years ago. It’s in the public domain. We have filed four patents on our product and believe that these patents will make it difficult for others to create a profitable product that can meet FDA standards.

The other aspect of intellectual property is the clinical data and regulatory approval. Some people have a misconception that once one company does a study and gets FDA approval, any future competitor can design a similar product and FDA will approve it without them having to do their own study. That’s just not true. Again, fusion cages are a prime example. It was over ten years between the first product to get regulatory approval and the eventual down classification. History has proven that the value of these approvals is great because it is always much more difficult to complete a study once there is already a product on the market. If you were a patient and Minimus had approval today, would you opt to take the FDA approved product or enroll in a study of another ozone product? Most patients will take the FDA approved product because there’s no need to take a risk on an unproven product. Likewise, most doctors will chose to use the FDA approved product because its not worth their time and energy to do an FDA clinical study. That generally holds true unless the new product is believed to be significantly better.

I’ve always said, patents are great but they are worthless if your product isn’t on the market. The spine industry changes so quickly, I believe there is just as much value in FDA approval and being early to market.