No Reimbursement Yet? How Neuralace Grows Device Adoption

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0:00 When we put the product first, that passion can fall off, right? But when you put the patient first, and what would you do if it was my mom or my dad? You have a different mindset that doesn't evolve around selling. Is is we're treating veterans without pills, needles, implants.

Providing a path for for physicians to try this therapy, you know, is is the strategy I've deployed, right? Before they have to commit to a capital equipment purchase. I would say that you need to confidently embody the vision. And stay the course. Welcome to Zero Friction. This is Terry Coutsolioutsos, and again we have a wonderful guest with us today, Chris Morano. He is a longtime veteran in the pain management space. He's currently the vice president of sales for Neuralace Medical. And we're here to talk about a few things today.

Number one, the evolution and pain management and where it's started and where it's come from. And then both Chris and I have been in the medical device space for a long time. So we're going to talk about evolution changes and then what frictions exist today that did not exist back in the past. So, Chris, great to have you on board today. Looking forward to our discussion. So as we lean into the discussion, give us a little background about yourself and the medical device space. What you do, who you do it for, and what you guys are are are on the market doing today.

Absolutely, and thank you, Terry. I I do appreciate this opportunity. We have very similar histories and know we've seen the progression of the medical field, especially, you know, the past 20 years and pain management. this all began from a restaurant manager to a contract pharma sales and had the great opportunity to launch MOBIC meloxicam. a non-steroidal anti-inflammatory drug. And that was in 99-2000. And from there, it picked up quickly.

2:54 You know, it went to a smaller what we called back then biotech company. and if you can watch the movie Painkillers, you'll see my story even more because I was part of that company before it became that company, and it was called Cephalon, and we sold Actiq Provigil. And those were very unique medicines, Provigil modafinil, still on the market and use I would say worldwide.

And Actiq, on the other hand, is your painkillers movie. And that's that was a fentanyl lollipop. And so that was quite unique, and I would call that the days of pain management versus today, 2026. were interventional pain and spine, right? And so having a part in the evolution of pain management to interventional pain and spine has been awesome. And it's been my world. And the passion really began when I got into implantables. And from the pharma days to Medtronic and launching their first rechargeable. Stimulator, right?

And at that point, having a mom with chronic pain, right? We all have family and friends with chronic pain. I got it. They're dancing one day, they're in bed the next three days. Is this real? Is this not real? It's very real, chronic pain. And in the United States, very prevalent. So the true passion began when I got into the OR. Right, and I was part of the care team and I was able to change a patient's day and life.

You know, I love that and you know and I feel what you're saying because I've been in the medical device space in a different arena, but I think the good ones and the great ones in our business are the ones that wake up with that purpose and that passion every single day You and know, there's a responsibility when you're a medical device rep, especially in early ther therapy evolution, when there's a lot of coaching and teaching going on with you know how to get an implant done and not just with physicians, but with staff and prepping and making sure that the right patients are being triaged and really helping to kind of navigate that that new pathway transformation that you know, healthcare hasn't had before.

5:40 And so you're there's a lot of things that happen in those spaces when you're moving from a traditional methodology of pharmacology and that pain management, and now you're stepping into a device like that there's a lot of care pathways that change with that that whole piece. It's not just the implant, but how do you get the mindset changed from one set to the other? And that's that's a big part of what early adoption medical technology companies and representation does. You want to talk a little bit about like that transformation piece and like how did you remove friction from that?

Like, you know, that's a that's a big piece of it is like moving the gold standard to a new standard, question, Terry. right? That's a really interesting concept. And I don't know that I've left friction. have I brought less friction? A hundred percent. and you know, we have I have been reinventing the wheel nonstop in this field, right? And and I say that even today with spinal cord stimulators and plantable neuromodulation, it's still very unknown. That you can put a pacemaker for pain in your back and stop taking opioids, let's call it, right?

If it's successful. And so, you know, the evolution that has occurred has been neat to see from, as you mentioned, pharmacological to where interventional pain was maybe a shot, an epidural, right? To today, minimally invasive spine, much more invasive in a sense, yet the goal still in interventional pain and spine man management is.

Reduce the chance of surgery for some patients who don't truly need surgery but live with chronic pain. Reduce the intake of opioids and oral medication, which today we're seeing tons of side effects are starting to pop up. gabapentin, Tramadol. You know, when the CDC puts out a statement that you may Want to reconsider taking gabapentin, in other words, you know, we're starting to see now the effect of the pharmacological evolution, which was huge in the 2000s, right? I mean, in my little town, we had, you know, seven Pfizer reps selling Viagra and Lipitor in a small county in central Florida, you know, to where that seven rep became one rep in the Snap of a finger, you know, came 2005-ish, you know, 2000.

8:33 And and so when I look at myself now though, today, I am I've shifted from invasive interspinous spacers, right? Helping the pain management field identify the opportunity. right to treat patients without sending them to the spine surgeon to now non-invasive with Neuralace medical right and still surrounded by pain management and neuromodulation right and so i don't know that i'm answering your question necessarily but in terms of of of how i've helped reduce friction in this evolution it's By putting the patient first. That's it. I mean, if I have to spitball think this, it's not hard.

When we put the product first, that passion can fall off, right? But when you put the patient first, and what would you do if it was my mom or my dad? You have a different mindset that doesn't evolve around selling. It evolves around a patient and their life Listen. and their outer circles and what are they going through, right? And that's that's the path I would say I've reduced friction in a very, very friction heavy field because we're also battling with The spine surgeon community, you know, maybe saying that, you know, we shouldn't be doing these things, right?

Meanwhile, there's very talented interventional pain and spine physicians that are doing a great job today with minimally invasive spine, right? And so I think by putting that patient first. it's it's carried my passion for over twenty-five years to help the evolution of this field become, you know, where it has, which depends on who you talk to, right? it's a lack of understanding still today about what pain management physicians do. You know, and and and I would say, I don't know, you tell me.

11:03 As a whole, would you say that the community, if you will, places pain management physicians as positive or negative? I wouldn't say neither, I to be honest with you. Yeah. I would and it depends like my mind say revolve when you say pain management to me, my mind my mind rolls into device when when I hear that. Where Maybe if you rolled into the pharmacological perspective, that's where I think the negative resonance is, is that, you know, the the painkiller, you know, and I Yeah. live in Florida, so it's, you know, one of the most notorious states for, you know, pill abuse in the country.

As And so I do, Terry, and so, yeah. you know, so that connotation for me, but what Yeah. yeah. b because I've been in the device space so long when people say to me pain management, my mind typically rolls into a device orientation.

Not not the pill factory component. But if you're thinking pills, I get where that negative component skyrockets for sure. that that evolution is carrying right. to your point, you're more biased as I am coming from these bigger companies, Medtronic, Boston Scientific, Abbott. Sure. Yeah.

It's what we know, you know, and here we are today. Me as VP of sales, which was my twenty-year mission, right, of taking a non-invasive therapy for chronic nerve pain patients, right? And providing a gateway to the full spectrum of what may come, maybe not, implantables, right? And and that's what we're doing today at Neuralace is We've created a mission, goal, to make history with Axon as the gateway to neuromodulation. So if you have chronic nerve pain, painful diabetic neuropathy, you have the ability to try a 13-minute treatment with a coil over a nerve, without pills, without needles, without implants.

Without sutures, without a scalpel, without what you know, I was getting ready to lean in yeah, this whole conversation because I think you're taking pain management to another level. Now now you're taking a therapeutic level that's not invasive, which, you know, you know, our our healthcare system is broken so badly in in America. I mean, we have the greatest technology, we have the greatest physicians. I just think that the system itself and how the workflow and you know, getting appointments and getting scheduled and how you pay for it has just been you know, it's turned into a real nightmare for a lot of folks, And neuromodulation's interesting because we are a body of electricity, right?

14:03 And so we're seeing a lot of uses we didn't realize, especially with Axon, you know, were possible. You know, and and areas, you know, from the neck down and and treating, you know, patients we didn't realize we would have an a positive effect on. And taking neuromodulation Out out of just electrical stimulation to now magnetic Yeah, so talk to me about like the advantages of magnet magnetic therapy at this point versus the So from a scientific perspective, electrical stimulation is created with a lead and a an electrodes placing an anode and a cathode on these electrodes, just like a pacemaker lead in the heart, right?

Turning up the voltage for patients to have a paresthesia around the nerve. And we know that that that that lead Electricity is circular, right? And the circle of electricity will catch those nerves in in its path. Whereas magnetic is a blanket. And we know this with animal studies, right? And so it's not electrical, but it's magnetic. Magnetic, right? And I I do this motion with my hand because there's been a lot of studies. Over the past three, four decades that show a magnetic field having the potential of remodeling, right?

Or regenerating. Now that's theoretical, but when you look at the fact that we treat a painful diabetic neuropathy patient who falls every week, has holes in his walls Yeah, or her, and now can actually feel their feet. and not fall with a magnetic waveform, there's something happening. And that's, you know, I I have family members that are suffering, well, one family member that's suffering from severe neuropathy in their feet. And I can just tell you how debilitating and the friction that happens in somebody's life with regards to that.

Like the quality of life, you know, the the injuries from a falling perspective. and it's an unforgiving chronic disease. It's not it's it does not go away. And For the most part, it doesn't get better. And so these patients are looking for a way to restore the quality of life back again. Otherwise they're gonna be destined for, you know, a wheelchair or worse. and and they're gonna be taking gabapentin, most likely, which we know has, early signs of dementia now. -hmm you know, this is all fact, not anecdotal.

17:07 And and so when you only have an option of gabapentin, because you've had surgery already, let's call it, or not, how much hope do you have? What does that do to your mental state? That you can't feel your feet. You really can't stand up and cook. for family as you would wish to. Right? And now I just had one treatment for 13 minutes today. I have this really unique sensation I haven't had in 15 years. My toes like tingling. What's happening? And then five more treatments over that first month.

I have sensation and then one a once a month treatment, three, six months later, the true optimization can occur with that magnetic peripheral nerve stimulation. 13-minute treatment. Thirteen point two to be exact. Four hundred pulses almost every second that the coil delivers to that injured nerve. And so what's the the adoption of this therapy for neuropathy versus other? So is this early phase? Is this, you know, how does that like haven't, Sure it is early phase and And you know, a lot will point to TMS as being a like therapy.

And it what is. It's it's the transmagnetic stimulation. Okay, got it. Right? Transcranial magnetic stimulation. So it's it's been used for decades for for depression, Okay, opioid dependency, and is placed on the head. In a similar fashion as our coil, but we're neck down.

Got it. Right? And so what Neuralace Medical has accomplished is a energy protocol with a magnet that can reach 1.6 Tesla, strength of an MRI, with a very low 0.5 hertz frequency that is Okay. patented. And Whereas neuromodulation, spinal cord stim in particular, right, is a much higher frequency. You look at some of the systems today, they have 10,000 Hertz, right? Rarely, when we program a spinal cord stimulator, are we going below 10 or 20? Why? Because it has this thump effect on the nerve. And so when they went to 10,000, you can't see this.

19:52 Patients didn't feel it anymore, but we're going to the opposite spectrum with a non-implantable now at a fraction of a hertz. Right? And so, you know, patients have no downtime. Patients come into a treatment room and in five minutes start a 13.2 minute treatment, and they're out of the office in 25 minutes, get up, walk out, right? No downtime. And so, you know, we have four FDA cleared indications: chronic intractable pain, and under that post-traumatic nerve pain, post-operative in the lower limb, and then painful diabetic neuropathy, right?

The challenge with this and why the adoption getting to your answer has been reinventing the wheel again and finding paths. Where patients can access this without Medicare paying for it is the friction, right? Is is our CMS hasn't, over the past three years of being at the table with CMS, requesting reimbursement, you know, changes, hasn't adopted it. And that's that's the challenge with adoption, is patients don't have access to this. But what I have been able to uncover as a path. Is for VA, right? And that's where this product started.

Right? So VA community care, which is being heavily supported by the administration, sure. Yeah, right, to bring VA patients out of the VA centers into community care, right. has picked up Axon. And fortunately, we have a very strong story now. That CMS has to consider you would you would think, right? Is is we're treating veterans without pills, needles, implants. Imagine that, you know. And having know 70% you know, efficacy in these patients, right? And this is in our RCT studies. You know, lower lower depression, lifestyle, you know, yeah, lower opioid use.

What what do we miss in here? Right? We have our own CMS code, but it's a what we call a Category III code. And, you know, especially the commercial payers find that to be experimental, yeah and they cannot pay for that. And that's that's friction that needs to go. You know, that's the kind of friction that we're talking about in healthcare system where, you know, it just doesn't make sense sometimes. It doesn't make sense that you want to give a patient an opioid or a s or a surgery instead of providing a path that could work with nothing else but not a 13.2 minute treatment that's non-invasive.

22:51 What am I missing? So we we have taken you know the company from when I started in March 2025. There was one Dot on our map on our website. Well, there's 40 plus dots now. And this is without Medicare and commercial payers supporting Axon therapy. Right, And so we've had to find paths with workers' comp, which we're getting compelling story. We're getting workers back to work in six to eight weeks with this 13.2 minute treatment they do, right, you know, for a month. Two months, right?

And so now when when when we have these national, international carriers paying for Axon therapy, they're seeing the cost savings also. right. Let's talk because that's important to these carriers. Yeah, of course it is But it's also important to to the the community, to our country, right? Cost savings. so we can provide something that is non-invasive and save our system money. Wow, Let's support that. provide provide a high level of quality of care Of of course. at the same time. Imagine that, right? Wow. Unique. What a concept.

So we're still at the table, you know, of of trying to reduce friction and bring access to patient care with Axon therapy. and it's working. and we're and you know, we're we're really excited because of what we've accomplished the past year and a half in the marketplace. You know, we're looking forward to two thousand twenty seven as we bring our our true first big you know, Series B round in, right? And and look at indication expansions. You know, and and have the ability to to bring on, you know, a nationwide sales team now, right?

We've proven ourselves, we've created brand recognition and and awareness, I'll call it too, right? we we are something now in the pain world. And and here I am in Vegas at PainWeek. A lot of VA administration providers are here in addition to just your private practitioners, hospital practitioners. But you know that's a way we've been really integrating Axon therapy into practice is is these conferences and and and Providing a path for for physicians to try this therapy, you know, is is the strategy I've deployed, right?

25:39 Before they have to commit to a capital equipment purchase. So you have like a demo, you know, trial trial period kind of thing, make So, you know, it easy. Take take the friction out of the way for yeah, you nailed it. your your potential customers and you know Yes, exactly. Yeah. And it and it it's it follows the premise they're used to in neuromodulation. With spinal cord stim implants, a patient has a test run or a trial, right? Three to seven to ten days, they try this therapy on, and then they get scheduled for their implant.

So what I implemented when when I started was the same process. Dr. Terry, I know you like the therapy. You want the therapy in your clinic. You want to provide this. You're the only one in the state considering it. How about we bring it in for a three-to-four-week trial and try it on?

Put 10 patients on two days in a row, like our treatment protocol. We bring our training team in. Train your staff and nurse, right, to execute. in you know in the in the treatments and under your supervision and then we leave the device three weeks. So what that has created is about a seventy, seventy five percent adoption, right? And Wow those trial devices stay in the clinics. that's pretty that's a pretty high close rate, you know, when you think about it for a second, you know, getting them in the door and probably probably prospecting the challenging piece, but once you've gotten it there, it sounds like you have a really good process in the system to create that sticky retention where they want to keep the the unit and keep using the therapy because they see benefit in it, right?

Absolutely. And here you are helping make history in a sense and bring majority of our new customers are the only one in their city or state. How exciting is that? Like you're you're Yeah and and you're helping people change a practice too. Like that's you know, that really is when you think about it. And I wanted to make a comment about it earlier because you and I talked one day and your passion was really resonating through the phone when we were talking. and And you know, how you've taken this company that was very challenged with getting this therapy adopted.

Pretty much have strapped the organization on your back and you went out and you and you built this process and now it's taking off and the therapy's developing and it's becoming well known and you know what a what a great purpose and mission to have. And but listening to you today, listening to you before I understand why now like why the therapy's actually starting to make ways because they have somebody like you bearing the flag too. Thank you, Terry. And I I mean I mean that sincerely because it it has been a a lifelong, career long passion to lead a new device in making history for patients in a sense, right?

28:52 Of providing a new non invasive option that they never had. And I and I keep saying making history, and that may sound cheesy, but that's that's that's the level I am I am embodying. and and for this company that anyone who knows me gets it right and and so it it it's it's an honor and and as hard as this is terry it is hard it i know we're gonna succeed and we're on the verge of that now right and i'm in You know, I'm in because of this this vision and this this career long, you know, goal, right?

To provide the best patient care we can, you know, with with new technology in in one field, pain, chronic pain. I think I think the market is, you know, it's really interesting how you talk about these four buckets and the market itself from an insurer perspective, and you and I have been this in space and work for large companies, and we've benefited by being a part of some really beneficial healthcare plans with a lot of big companies. And, you know, I I'm just speaking for myself, but I can remember when the premium felt like it was this big.

Your deductible was this big 20 or 30 years ago. And today, in today's market, your premiums feel like they're this big, your deductibles feel like they're this big today. And what you're actually talking about plays right into the fact that, like, there might even be a consumer play here for you, because most patients Are pulling their credit card out for their first five, six, seven, eight, nine, ten thousand dollars every year, anyhow. they also have HSA and FSA programs where they can benefit from. And so, like, instead of the patient just being directed all the time where the doctors are tapping them to go to this pathway or that channel, you know, there's an interesting angle here where most people don't want to be on the opioids anymore.

Like they they understand. Not just the the addiction issues, but there are other healthcare related issues that come with it. Most people don't want surgery and have to wear an implant and you have to deal with that. And now you have this non-invasive magnetic pulsation therapy that allows you to go into a doctor's office, get treated, and feel better. I mean, there's all kinds of angles on this thing that, you know, it's not You're not just having to fight through the healthcare system anymore. I think there's a place out there where, you know, patients can drive this therapy.

31:46 And you're finding it with the VA, by the way, which, Mm -hmm. Sure. you know, is a huge community. And they talk, man, like that community itself, that that veterans community, when they when something's working, those Facebook groups are really incredible how they they connect with one another pretty well. Yeah, I wish I could say this was scripted, you know, but you led me exactly to where exactly exactly to where, you know, my mind and and and then mouth was gonna go, right? Is what we're realizing too, outside of the VA community care, we're comp is the cash market and the United States healthcare system is booming because patients, you you you totally nailed it on the head.

And why? and they're fed up. They're fed up of constantly being denied, or paying way more than they can ever imagine just on insurance premiums and deductibles than they would have if they didn't even have it, right? And of course, mind you, you know, big events happen and and that's not the case and you need good healthcare insurance, right? You know, but in in a lot of cases we're seeing, you know. Cash is king and and I've read several different articles where it shows that cash is the faster growing market of payers is growing incredibly in the US for healthcare.

And it's amazing like you can if you even have insurance and you're paying the bill with cash, it's typically fifty percent more than if you were to say I don't have insurance, by the way. So, you know, that's the other side of it is if you walk in with your insurance card and then you pay your deductible, your bill might be fifteen hundred dollars. Otherwise you walk in and say, I'm a cash paying patient, your bill might be a thousand. And that's the other incredible thing about the cash consumer market is actually healthcare insurance it actually raises your cost personally from a cost of insurance perspective.

Yeah, Really interesting. So it is. that whole catechism is kind of coming together and I think, you know, the dots are starting to get connected in the marketplace. like I said, I think And that's next point, right? At the marketplace, right, is that these physicians now, I get to provide a very unique value proposition. Yes, you do. And that's where you were going a second ago. Yeah. Like, I think there's more avenues that you're not seeing, Chris. Guess what, Terry? You're right. I'm an N of one And man, I am open to great ideas that you have for sure.

34:21 And we can only do what we can, right, as an N of one and we have a sales a new sales member in in in the mid Atlantic that, you know, we're starting to expand our sales team to increase this footprint. All right. So That's great. And I I think, you know, for the especially we have a lot of founders and innovators and startup companies that are tune into the program. And I think, you know, this is a great founder, innovator, startup story, like where, you know, you're finding non-traditional ways to go find your way in the door.

The VA is not a traditional go-to-market strategy. It's typically an aftermarket. After you've gone to market strategy, you go to the government. And and you found a way that it it sort of is that's where you entered and now you've landed and expanded. And I think that's remarkable creativity, grind, grittiness, you know, finding those little creases to get into and and then you're making a difference. And that's the other part where these therapies and these innovations are bringing value and you're finding ways to create it.

So kudos to you and the team and you know it's a big week for you out in Vegas. as I always say it's a great forty eight hour town. I love to go in for couple days and get out. and so but anyhow what's next for Neuralace? What's next for, you know, Chris, where are you taking this thing? What what would you like to get out of today? Any messages to the other sales leaders out there that are struggling with new therapies. I mean, I know that like that was one thing that you and I talked about earlier is you had to you had to bust through that wall of inertia.

And you know talk to us a little bit about that journey. Yeah, and I and I think that leads us to the right partnerships, you know, collaboration with the right physicians, and a standard of care that embodies, you know, the overarching goal in our field, which is high high care, right? high care for our patients, best care. And you know, what I would say you know, as to other sales leaders in in particular, especially in the med device, is we need each other and we need to collaborate.

And for those that are in my shoes, you know, we we need to lean on each other for different avenues, as you started mentioning, Terry, for different collaborations and different ideas in how to commercialize, you know, a a new technology. and so it it's it's about community, I feel, that I want to further embody. And you know, it's it's the Napoleon Hill you know, concept of of a mastermind group, right? and you know, for the VC community, call me please.

37:34 We're going into our our Q4 around. And this is an amazing opportunity, Terry, that you know you I know honestly feel i is real and tangible, but attractable and an opportunity for our new team of investors to help make history with this, not only in the US, and we have a global impact possibly, right?

We are being pursued by many countries. And you know, we're we're on we don't have the resources to go there yet. We have launched in Mexico City. but you know, we're looking to expand and bring on the right group of investors that see our vision and potential of developing a new market of non-invasive neuromodulation that will only start with Axon and add right to that. portfolio. And so did I answer that right? I think you know, I don't think there's a right or there's a wrong answer.

I think you know, I think it's it's just a question and and I think you you gave us a really colorful aspect of what that means. And you know, the next phase is really, you know, you need you need some funding to get there. the therapy showing promise and you know, that venture that venture world is is your next phase and expanding the therapy, expanding your footprint, and expanding your indications, right? So it's all about those two or three things 100% spot -on. right there, right?

Yeah. Well said, Terry. Yeah. so as we got one more question for you and this is question I ask every guest and it was not part of our pre-discussion. So it's meant to kind of be a little bit of a knuckleball, a little bit of a curveball. And so You've had great success over the years and you know, just like anybody else, we've all learned from failures and successes over time. And so if you were to take current day Chris and you were to go back and talk to 22-year-old Chris when he just was handed, you know, a college diploma or some sort of graduation, some sort of commencement event in your life when you're moving forward.

What would the one piece of advice, just one piece of advice, personal, professional, financial, whatever it might be, what would the one piece of advice you'd give your younger self from what you've learned through your life today? Yes, that's a great question, Terry.

40:16 And I would say that you need to confidently embody the vision. And stay the course. Hm. Just gonna let that sink in for a second. So confidently embody the division and stay the course. believe in yourself something, right? example of twenty-five years ago when I I started in the pain management field and then got into the implantables and had a vision, right? Is this brand new. This is new technology. And and my vision was to become a leader and take a company and a new product.

Really for the benefit of of of patient care in treating the chronic pain patient in a way I would want to be treated. You know, think I And so that I that vision, I painted the picture, I knew it was clear, I knew what it looked like. And I I I would say I wish I was more confident earlier on that this is tangible, this is real, and it's something you can actuate. And and that's where I would say confidently embody the vision.

I love that. And we'll put a wrap on that with a nice little bow. you know, Chris, it's been a great conversation. And I'm so glad we finally met and you know, we had that phone conversation, but like, you know, Neuralace is great to have you and you're you're doing great things for the therapy. It was a great guest on the show today, and we wish you nothing but the best. Terry, thanks a bunch.