Axonics Modulation Technologies Inc., has developed an innovative, implantable medical device to alleviate bladder and bowel dysfunction. Based in Irvine, California, the company’s proprietary Sacral Neuromodulation (r-SNM) System is poised to enter a large, rapidly expanding market.
The first rechargeable, miniaturized device of its kind, the r-SNM System consists of a lead with electrodes and a small pulse generator implanted in the upper buttocks region. The product is designed to treat urinary and fecal incontinence and urinary retention.
The System “has been approved for sale in Canada, Europe and Australia and we are currently undergoing a pivotal study with the U.S. Food and Drug Administration (FDA), with a view toward getting approval of the product in the United States sometime during the first half of 2019,” says Axonics CEO and co-founder, Raymond W. Cohen.
Neuromodulation is a technology that alters or modulates nerve activity “by delivering electrical stimulation directly to a target area,” states the International Neuromodulation Society (INS), a non-profit group in San Francisco. Neuromodulation devices can treat epilepsy, migraines, spinal cord injuries, chronic pain, Parkinson’s disease and urinary incontinence, adds the INS.
Here’s how the r-SNM System works: when a person’s bladder or bowels are full, nerves in the pelvis transit messages that are received by the brain. These messages signal it’s time to use the bathroom. These messages can be compromised, however, resulting in an overwhelming and urgent need to void and/or ensuing leakage. The r-SNM System emits mild electrical pulses to stimulate the sacral nerve located in the pelvic region. This stimulation “corrects” nerve messages about bladder and bowel status, reducing the risk of accidents.
“The stimulator is a small miniaturized, rechargeable device that is only 5 cc’s in volume. That’s what goes in the body. Our device is designed, qualified and validated by agencies around the world to have a life in the body of at least 15 years,” says Cohen.
In addition to having an innovative product, Axonics enjoys the benefit of excellent timing. The current market for sacral neuromodulation devices aimed at treating urinary/fecal issues is worth roughly $700 million, says Cohen. He expects this to grow to $1 billion over the next few years. Axonics research indicates that 85 million adults in Europe and the U.S. suffer from Overactive Bladder (OAB) while another 40 million endure fecal incontinence.
The overall worldwide neuromodulation device industry for all disorders “is expected to grow from more than $6 billion in 2014 to over $10 billion in 2018,” adds the INS.
Medical devices giant Medtronic, which is headquartered in Dublin, Ireland, is the first company to market a sacral neuromodulation device, called the InterStim Neurostimulator, to treat bladder issues. Cohen believes the r-SNM System is superior, however. The r-SNM System lasts longer than Medtronic’s product (which has to be removed from the body and replaced every few years), is rechargeable, and is smaller in size (an important consideration when dealing with implantable devices), explains Cohen.
In addition to the implantable components, the r-SNM System involves a programming unit and “patient-facing devices. One is what is called the patient remote. This remote control is a small hand held device that looks like a key fob to your car. It allows the patient to wirelessly communicate with their [implant] to, among other things, understand how much energy is left and when they need to recharge it,” says Cohen. A recharging device is used for this purpose “once every two weeks, for about an hour.”
Axonics was founded in late 2013, by Cohen and two other partners. Cohen himself has decades of experience in the med-tech field. His extensive background in the industry meant the fledgling company benefitted from a wealth of connections and a group of engineers who are expert at designing devices.
“We started with the notion that we could build a miniaturized rechargeable neuromodulation product and then we did significant analysis of the various different clinical indications that people were pursuing. We looked at the size of the market then concluded our best opportunity for return on investment and return on time would be to go after the sacral neuromodulation sector. One of the decision drivers was [having a huge] market with only one competitor. And we felt our product would offer significant distinctions compared to our competitor’s product and be well-received in the marketplace,” recalls Cohen.
Under the guidance of an in-house Intellectual Property (IP) lawyer, Axonics spent many initial months examining patents and IP issues, so Axonics management had a firm grasp of the field they were entering. Once this research stage was complete, the company began raising capital. Some $20 million was raised in March 2014, and this capitalization enabled Axonics to hire engineers, technicians and other staff. Most of this initial core group were individuals Cohen had worked with previously.
At this point, more research, albeit of a very different kind, was conducted.
“Before we engineered one line of code, we spent a lot of time with patients to understand what it’s like to live with an implantable device, what they like and don’t like about the recharging experience, what they like and don’t like about using a remote. [We spent time] with physicians, asking about how they used the product they have. We spent a lot of time collecting these inputs,” states Cohen.
Once laboratory work commenced, the end result was the r-SNM System. It is Axonics’ first and so far, only, product.
“Our team developed the technology in total. It’s not something we purchased from other parties. We developed it from the ground up. We’ve patented many of the characteristics of the product. We have literally dozens of issued patents in the U.S. as well as worldwide patents. Like Apple, we design everything and we own everything, yet we work with sub-contractors to produce certain bits and pieces of our product. We have a number of key vendors. Maybe there are four or five key vendors all over the world that do certain functions for us with various parts and pieces of the product,” states Cohen.
At present, Axonics has roughly 60 employees. Asked to describe Axonics’ corporate culture, Cohen says, “If you had to sum it up, the way we operate is that everybody is in the know about everything all the time. We value transparency. The idea is to be an open book so everyone is informed. In my experience, in over 35 years in business, if you don’t tell people what’s happening they’ll make up a story and the story is usually much worse than reality. The other thing is, we give people the tools they need. We provide necessary resources. The company is extremely well-capitalized. We have raised $95 million since March 2014. Money has not been an issue. People are treated with respect and given the tools they need. People work really hard here, they get paid well and they produce results.”
A big part of Axonics’ recent workload had centered on getting regulatory approvals for its product. In November, 2017, the FDA granted an Investigational Device Exemption (IDE) for the r-SNM System—a vital step for doing human trials. In early January, 2018, Axonics announced that 11 patients had been implanted with an r-SNM system in the first round of trials for FDA approval.
“We envision about 120 patients being treated in this study for approval in the United States. We’re focused on the United States because about 80 percent of all the revenue from this market is coming out of the U.S.,” says Cohen.
If all goes to plan, many of the patients in this study should receive relief from bladder problems.
“In terms of therapy, [the r-SNM System] has proven to be very safe and highly efficacious. In general about 80 percent of the urinary patients will have successful treatment, defined as at least a 50 percent reduction in symptoms. About 90 percent of patients with fecal incontinence will have a significant reduction in episodes and in their symptoms as well,” states Cohen.
In January 2018, Axonics also received approval to market the r-SNM System in Australia. Axonics received similar approvals from Canada and Europe in 2016.
Once FDA approval is granted for commercial sales, Axonics is looking to do a worldwide launch and a significant expansion. The company already has subsidiaries set up in Europe to facilitate future business. Over the next few years, the company might go public with an offering on the Nasdaq, or perhaps be acquired by a big med-tech player.
A lot of ground work has to be completed first, however, and new personnel brought on board.
“We’re going to need sales people and operational people. We’re moving into a 26,000 square foot facility in the second quarter of 2018. Our headcount will grow incrementally. Upon FDA approval, we’re looking to hire as many as 200 sales people. The nature of the company will change clearly as we get closer to a big market launch,” states Cohen.