Neurocarrus

Early Stage

Non-opioid drug treats pain without risk of addiction.

Analytics

Raised to Date: Raised: $341,682

Aggregate Commitments $

Platform

Wefunder

Start Date

11/05/2018

Close Date

04/18/2019

Min. Goal

$55,000

Max. Goal

$1,070,000

Min. Investment

$100

Security Type

SAFE

Funding Type

RegCF

Valuation Cap

$7,500,000

Discount Rate

0%

Rolling Commitments $

Status
Funded
Reporting Date

04/30/2019

Days Remaining
Funded
% of Min. Goal

621%

% of Max. Goal

32%

Likelihood of Max
Funded
Avg. Daily Raise

$2,083

# of Investors

513

Momentum
Funded
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Location

Monterey, California

Industry

Healthcare & Pharmaceuticals

Tech Sector

Neurocarrus is developing a non-opioid drug to treat pain without the risk of addiction. The founder has been working in the space for over 25 years, and so far, they’ve shown promising results in animal trials.This drug is highly innovative and was awarded $10,000 by the U.S. National Institute on Drug Abuse. Neurocarrus was also a member of the IndieBio Accelerator Spring 2018. With this campaign, they will continue their pre-clinical development with the goal of being ready for clinical trials in humans by 2020, and on the market in seven years.
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Analyst Report Analyst Report Methodology Article

Summary

Amount raised: $107,000+ as of December 25th

The Neurocarrus team has been selected as a “Deal to Watch” by KingsCrowd. This distinction is reserved for deals selected into the top 10-20% of our deal diligence funnel. If you have questions regarding our deal diligence and selection methodology please reach out to hello@kingscrowd.com.

Problem

The problem of pain management is nothing new to the U.S. market. In fact, the pain management therapeutics market was valued at $60.2B in 2015 and has only grown since.  

The market is currently dominated by opioids and non-steroidal anti-inflammatory drugs (NSAIDS), which captured 52% of the market in 2015. Unfortunately, prescribed opioids have been linked to a serious drug abuse problem that dramatically spiked over the past fifteen years in the U.S.

As a result, the main pain medications that doctors prescribe to treat patients can also pose a significant threat not only to their personal health, but also to public health.

By 2016, overdose deaths involving prescription opioids were five times higher than in 1999. By 2017, the U.S. Department of Health & Human Services (U.S. HHS) declared a public health emergency to address rising national opioid addiction.

The U.S. HHS even escalated the crisis to an epidemic and unveiled a five-point Opioid Strategy geared towards prevention, treatment, research and advancing the practice of pain management.

Despite this strong call to action and widespread media attention, the problem of pain still largely exists, as there has been an alarming rise in the number of patients suffering from chronic pain due to the rapid growth in people aged over 65 years old in the population.  

Meanwhile, treating pain continues to have dire consequences to our society. It seems like now, more than ever, we need to find new ways to help those who are suffering with treatments that are safe and effective.  

Problem

Neurocarrus’s innovative pain treatment, N-001, aims to disrupt pain signals from sensory nerve cells through targeted delivery of bacterial proteins, in a way that circumvents the issue of off-target delivery to motor nerves that results in addiction development in patients.

Company & Founder

 Paul Blum is the CEO and Founder of Neurocarrus. He received a PhD in microbiology from the University of California, Davis and completed his postdoctoral studies at the University of California, Berkeley and Stanford University School of Medicine. 

He then served almost 30 years as a Professor at the University of Nebraska, in addition to serving as an Adjunct Professor at the University of California, Santa Cruz. His career in academia has been dedicated to researching protein engineering and microbiology, and he has led the development of numerous cell line engineering technologies.

Blum has dedicated his work to finding solutions to societal needs like pain treatment and renewable energy. He brought his scientific expertise and background in biology to the world of biotech startups when he started Neurocarrus in 2015.

Market Opportunity

The global pain management therapeutics market is expected to expand at a 3.7% CAGR from 2016-2024, reaching an estimated market valuation of $83.0B. Changes in demographics bring tailwinds to the market, as an increasing portion of the population continues to age, adding to the number of people dealing with pain.

The global geriatric population (people over the age of 65) is expected to rise by 2B by 2025, increasing to represent 22% of the projected global population. This key demographic is a main driver behind an anticipated uptick in demand for pain medication, as geriatric people tend to be prone to diseases like arthritis, joint or bone pain and nerve damage, among many other ailments.  

With an increase in need for medical care coming from an growth in the number of citizens dealing with pain, the U.S. government is likely to continue making favorable regulations in the pain management therapeutics market. Legislators are looking to reform healthcare to increase access to pain treatments for their steadily aging constituents, and government funders are looking to develop, approve and commercialize methods of diagnosis and treatment of pain.

The global opioid market, which was valued at $22.96B in 2015, is expected to grow at a 4.8% CAGR from 2017-2025. While this segment of the broader pain treatment market also benefits from the same general tailwinds of aging population and increasing number of pain patients, the opioid market faces strict regulations by the U.S. FDA due to its direct linkage to the substantial number of deaths caused by drug abuse across the nation. This poses a large threat to the future profitability and growth of the segment.  

Meanwhile, the global market for non-opioid pain treatment, which was only valued at $9.9B in 2017, is projected to catch up to the opioid market by reaching an estimated valuation of $22.6B by 2022, growing at 18.0% CAGR.

This segment of pain treatment is split into five main categories: medical cannabis treatments, capsaicin-derived treatments, menthol-containing treatments, omega 3 fatty acid-containing treatments, and botulinum toxins. Medical cannabis is the leading category, accounting for 73% market share within the segment.  

Details on the drug

 Neurocarrus’s pain therapy, N-001, is a non-opioid pain treatment that takes a new approach to botulinum toxin treatment. By safely disrupting peripheral sensory neurons, N-001 is able to alleviate pain from tissue damage, inflammation or acute nerve damage by only affecting the physiological aspects of pain without invasive surgery or absorbing drugs into affected tissue.

 Unlike other existing FDA approved treatments in the market, N-001 only affects sensory nerves by using neuron-specific targeting, leaving motor nerves untouched and circumventing consequences of off-target effects, like addiction formation.

 N-001 is locally delivered by injection or topical solution, rather than by prescription pills, and won’t enter the brain. It also avoids the doping effects that other pain drugs cause. As a result, the drug has virtually no potential to cause addiction in patients, while still remaining safe and effective for pain treatment. As a result, Neurocarrus sees its treatment as leading technology in the fight against the opioid crisis.

Competitor Analysis

In examining Neurocarrus’s N-001 treatment’s strategic positioning in the market, it’s important to look across two key dimensions: pain treatment and opioid addiction treatment. While there are major players with significant funding and research and development capabilities in the market for pain treatment, in addition to other innovative healthcare and biotech companies geared towards serving patients who suffer from addiction, Neurocarrus has positioned itself in a critical corner of the market by using its non-opioid-based technology to tackle pain treatment and prevent future drug abuse and addiction.

Source: KingsCrowd Research

 

Business Model Validity

Neurocarrus published positive in vitro test results in 2016 in the Scientific Reports journal and has domestic and foreign patents pending for the N-001 protein treatment. The company has also received an award of $10K from the National Institute on Drug Abuse earlier this year in February.

 The Neurocarrus team also recently moved from its Lincoln, Nebraska headquarters to San Francisco to join a four-month accelerator program at Indie Bio to develop its biotechnology by moving through an advanced animal pain model in preclinical trials in order to move forward with clinical trials.

 However, while N-001 seems to be a promising treatment for pain and way to address pain medication addiction, the technology is still in the early stages of development and remain largely unproven.

Should clinical trials cause unacceptable adverse side effects or fail to meet FDA requirements, among the requirements of other non-U.S. regulatory authorities, the treatment may never reach the market. As a result, passing clinical trials poses a huge risk to the viability of Neurocarrus’s future profitability.

The Terms  

Neurocarrus was able to hit its seed round fundraising target already on WeFunder, but is allowing investors with conviction in a valuation over and above the company’s current valuation to be able to reserve the right to purchase future shares in the company. While it may be a worthwhile investment at its current valuation of $7.5M, the risk of not passing clinical trials and reaching the market poses significant risks that could raise concern for potential investors.

 However, the positioning of this pain treatment is a critical aspect of how the company delivers more value to customers in the market, as many of Neurocarrus’s competitors have aligned themselves one-dimensionally to either solely targeting pain treatment or pain medication addiction treatment, rather than both.

 Meanwhile, its direct competitors face similar risks and challenges of passing clinical trials, receiving patent protection and raising funding for research and development. As a result, the valuation of the company could be well over its $7.5M valuation, should its technology prove to be successful and superior.

With tremendous upside in a success scenario, but with consideration that there is also considerable downside due to the nature of getting new drugs approved through extensive clinical trials, Neurocarrus is a Deal To Watch. Invest HERE if you can tolerate the enhanced risk of an early stage biotech investment.

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Platform: Wefunder
Security Type: SAFE
Valuation: $7,500,000

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