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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

Neuros Medical, a medical device company focused on alleviating chronic post-amputation pain, received $25 million from Trinity Capital, CEO David Veino tells Aaron exclusively.

Why it matters: Post-amputation pain — including phantom limb and residual limb (or "stump") pain — impacts nearly 1 million Americans, and Neuros Medical offers an alternative to highly addictive opioids.

Details: Fresh capital will help Aliso Viejo, Calif.-based Neuros Medical scale operations to secure FDA approval for its bioelectric nerve block technology and begin commercialization, Veino says.

The funding is being doled out in two tranches, with a smaller tranche to start, and another, larger tranche, once Neuros Medical gets FDA approval.

The company expects to receive FDA clearance in the first half of 2024.

"A lot of thought went into the size of the loan and how we want to structure it, to make funds available so it's useful and helps mitigate risk," says Trinity senior managing director Rob Lake.

How it works: Neuros Medical's Altius System delivers a bioelectric signal — via cuffs placed at the source of pain — to affected peripheral sensory nerves to block the pain signal.

Existing standard-of-care for pain management includes prescribing opioids and gabapentinoids.

According to Veino, Neuros Medical can reduce acute pain by 30% in 30 minutes and by 50% reduction in two hours.

"We want to relieve pain and restore life and improve quality of life," says Veino. "The only option up until now was with opioids."

What's next: "This funding will also us to get into the commercialization process, but I'm not sure how far into the process this will get us," says Veino.

Neuros Medical will likely raise additional funding, he adds.

Veino is confident about the outcome of getting reimbursement status.

"We know the market is large $12B+ ($11B = prevalence; $1B = incidence); we are confident in receiving reimbursement through the New Technology APC system reserved for new novel technologies that aren't covered by existing codes."

The big picture: There are more than 2 million amputees in the U.S., with 185,000 new amputations occurring every year.

"We really wanted to help this underserved large population, that will only continue to grow," Veino says.

Catch up quick: The company has raised a total of $97 million in outside capital, according to PitchBook.

Neuros Medical has received approximately $100 million in funding.

The post-round valuation as of September was $92 million, per PitchBook.

He said the company is pre-revenue until commercialization in 2024.

What they're saying: "Neuros checks all the boxes in terms of what we look for: Focused on a large, underserved market, with a strong VC syndicate as well as experience and expert management team, that has clinical data and FDA approval," says Lake.

"We are playing the long game here and anticipate being with the company over the next four to five years," he says.

1 big thing: Neuros Medical gets $25M for amputee pain relief

Illustration of a handshake with shapes and money.

Once-buzzy AI startup Olive is selling the remainder of its assets and winding down operations, per two memos viewed by Erin.

Why it's the BFD: The memos mark the nail in the coffin for Olive, whose purple "go save health care" buses once dominated industry conferences.

Details: Based in Columbus, Ohio, Olive has sold its remaining business lines to health care companies Waystar and Humata Health and, per an internal Waystar memo viewed by Axios, is ceasing business operations.

"I am announcing the acquisition of Olive's clearinghouse and patient access solutions. Please join me in welcoming new team members and clients, as well as expanding our relationship with many joint clients," writes Waystar CEO Matt Hawkins in the memo, which also references the "sensitivity of Olive's announcement to cease their business operations."

Another memo posted to Olive's website on Tuesday reads that with the sale of its remaining units the company "will wind down the remainder of its business."

Flashback: Previously valued at $4 billion by big-name firms including General Catalyst, Tiger Global, and Vista Equity Partners, Olive was the highest-profile startup in health care automation.

That holy grail promised to cut costs and direct more time toward patient care — but Olive itself cut corners in seeking to realize its mission, an Axios investigation found.

Catch up fast: Olive AI underwent multiple rounds of layoffs and had been slowly selling various arms of its business, which once spanned both the payer and provider sides of the health care continuum.

In February, Nuvo Holdings-backed Availity agreed to acquire Olive's utilization management division or payer-facing prior authorization business.

Last fall, Olive shared in a memo seen by Axios that it planned to "divest" its tools for population health management and the 340B program, which mandates drug discounts for Medicaid and Medicare.

2. The BFD: Olive AI sells off final business lines

Illustration of the Olive logo as a gas gauge on empty.

Want more health tech deals? Check out the Axios Pro Deals Tracker beta.

• SkyCell, a Swiss developer of medicine and vaccine transportation containers, raised $57m at a $600m valuation led by Catalyst. https://axios.link/46Vckbg

• Yuzu Health, an NYC-based developer of employer health tools, raised $5m in seed funding led by Lachy Groom with participation from Neo, Day One Ventures, Altman Capital, WndrCo, Browder Capital and individual backers from companies including OpenAI, Stripe, Coalition, Brex, Notion, Deel, Mercury, Lattice, and Vanta. https://yuzu.health/ 

• LighthouseAI, a Los Angeles-based company pharmaceutical supply chain tool developer, raised $4.6m in seed funding led by Healthy Ventures and BluePointe Ventures with participation from Eileses Capital, Bertelsmann Next and the Legal Tech Fund. https://axios.link/3FBrCpg 

• Almouneer, an Egyptian platform for treating diabetes and obesity, raised $3.6m in seed funding. Global Ventures led, and was joined by Proparco, Digital Africa and Wrightwood Investments. https://axios.link/3Mjz7VW

• Midas Healthcare, a Cleveland, Oh.-based developer of technology for the storage and transport of controlled substances and other medications, raised $2m in unlabeled funding from MCPC Healthcare Investment. https://axios.link/46NJ9Xm 

• Havencrest Capital Management-backed home care platform Avid Health at Home acquired Chicago-based home care provider Independence 4 Seniors. https://axios.link/3MoksJ8 

• Zynex (Nasdaq: ZYXI), an Englewood, Colo.-based medical device maker with a $290m market cap, hired Cantor Fitzgerald to explore strategic alternatives that could include a sale, per Bloomberg. https://axios.link/47fed1V

3. Deals o' the day

• Steve Finnern, formerly COO at Axoni, joined Legacy as president and COO. https://axios.link/3tLUys4

• Dan Pivirotto, formerly senior partner of marketing at Amazon Pharmacy, became director of business development at Tempus Labs. https://www.tempus.com/

• Claudia Williams, formerly CEO of Manifest MedEx, became chief social impact officer at UC Berkeley School of Public Health, effective in January. https://publichealth.berkeley.edu

• Christopher Genovese, formerly SVP of sales at Wysa, became US commercial sales lead at TELUS Health. https://www.telus.com/en/health

4. It's Personnel

🫄🏻Walmart expands nationwide coverage for doulas — AP

💊 Pharmacy staff from CVS and Walgreens start 3-day walkout — Reuters

5. Your daily dose

Illustration of a weekly pill dispenser box with a newspaper called "daily dose" in each compartment.

Situational awareness: President Biden yesterday issued an executive order establishing new standards for AI safety and security.

🖖🏻 Erin is dressing up as 7 of 9 from "Star Trek: Voyager" and can't wait to pass out candy to the neighborhood youth.

☠️ Thanks for reading, and extra thanks to newsletter editor Claire Rychlewski and copy editor Mickey Meece. Please ask your colleagues, friends, and family to sign up.

October 31, 2023

1 big thing: Neuros Medical gets $25M for amputee pain relief