Upwards of 25 percent of the four million annual ICU admissions in the United States experience neurological complications. Half a million ICU admissions are due to brain diseases and 75 percent of these experience clinical worsening due to brain bleeding or swelling. Beyond the ICU, there is no convenient, non-invasive method for brain monitoring in ambulances, emergency departments or operating rooms to detect active bleeding. With these medical challenges in mind, a team of emergency medicine physicians and neurologists at the University of Cincinnati set out to develop a reliable, non-invasive monitor for medical conditions of the brain, specifically bleeding. In 2013, Sense Diagnostics was born to commercialize their technology. One of the company’s founders is serial entrepreneur Dan Kincaid, who is also a member of the Queen City Angels.
Over the next two issues of The Halo Effect (T.H.E.), we will interview Dan to find out more about him, his latest venture and the progress of its technology and what’s next for the three-year old company. In part one, we focus on Sense Diagnostics.
T.H.E.: What is the science behind Sense’s technology?
Kincaid: The Sense Diagnostic device uses radio waves to detect physical changes in the tissues of the brain. It relies on the fact that the different tissues found in the brain have unique electromagnetic properties. As changes in the brain occur, the device signal changes in characteristic ways. We use our proprietary software to interpret these signal changes and provide information to clinicians in real time.
T.H.E.: In addition to you serving as CEO, who else is part of your development and leadership teams?
Kincaid: Our director of R&D is Dr. Joe Korfhagen, a Ph.D. in Neuroscience from UC who has worked with the technology for six years. He left the university in March 2016 to join the company full time. Dr. George Shaw is an emergency medicine physician and Ph.D. physicist. He assists in the development of the signal interpretation algorithms and theoretical basis of the technology. Dr. Opeolu Adeoye is a Neurointensivist physician at UC. He serves as medical director for the company and is responsible for clinical trial design and execution. Dr. Matthew Flaherty is a neurologist at UC. He serves as Clinical Director for the company, and he participates in clinical trial design, acts as liaison with the scientific and medical communities, and assists in development of new clinical applications for the technology.
T.H.E.: Where are you in the development of the company and its technology? How soon until it will be on the market?
Kincaid: We started our first in human clinical trial in February 2017. The study will demonstrate the safety of the device and give us further information on the usability of our current design in patients. We are also continuing the development of additional indications beyond detection of brain hemorrhage. We anticipate kicking off a pivotal clinical trial next year that will lead to FDA approval within two years.
T.H.E.: What is your competition? And how does your technology compare to what is currently on market?
Kincaid: The need for our product comes from the way critical brain injuries are monitored today. Currently, when patients with a brain injury come to the hospital, they receive either a CT or MRI. If immediate surgery is not required, the patient is monitored either in the ER or the ICU. The primary means of determining if there is continuing or new bleeding in the brain is a clinical exam. The exam consists of the physician or nurse making a series of observations and asking the patient a number of questions. If a patient’s cognitive state deteriorates, the physician orders another CT or MRI. Unfortunately, by the time these outward signs of active bleeding show up, much of the damage to the brain has already occurred.
There are several companies attempting to solve the same or similar problems. Two technologies are already on the market. Infrascan’s Infrascanner uses near infrared radiation to detect bleeds in the brain. Because near infrared radiation is absorbed rapidly by the brain tissues, this product can only detect a subset of hemorrhages – primarily those occurring near the surface of the brain. Brainscope’s Ahead product uses an EEG based technology. It is currently indicated only for minor brain injuries, not the severe injuries we are targeting. There are three other companies developing competing products. Neither product is on the market and information about them is limited. Based on what each has published, we believe that our approach will yield superior results.
Next month, we will have part two of our interview with Dan focusing on his involvement with Sense Diagnostic and his perspective on the local entrepreneurial and funding ecosystems building in the region to support businesses like his.
In the last issue of The Halo Effect (T.H.E.), we provided part one of an interview with Dan Kincaid, co-founder and CEO of Sense Diagnostics. In part two, we find out a bit more about Dan and his involvement with the company, the financial support for company’s like Sense in Cincinnati, and the role of QCA.
T.H.E.: You are a serial entrepreneur and an investor. What made SENSE the right “next” opportunity for you?
Kincaid: I have been looking for the right opportunity for some time. My criteria were pretty simple, the company had to be solving an important medical problem; needed a product that could provide significant clinical improvement; had to lower the overall cost of care; and had to have a group of brilliant people associated with it who were passionate about seeing the product improve people’s lives. Equally important, the problem had to be one I could be passionate about solving myself. Startups are too hard to get into if you are just trying to make money. There has to be more to it to sustain your commitment through the hard times (and there are ALWAYS hard times).
While these criteria were simple enough to conceptualize, it was hard to find one opportunity that had everything I was looking for. With Sense, I finally found it. Some three million Americans suffer strokes or traumatic brain injuries each year. Many of these people either die or are left severely disabled. The Sense technology can lead to quicker detection of bleeds, which can allow doctors to start treatment sooner, saving lives and avoiding long-term disabilities for patients. As I dug into the economics of the issue, it became clear that the product could lower the overall cost of care for the health system while saving money for hospitals and providing an excellent return for investors. Personally, I had experienced a situation where a family member could have been helped by the technology, so I was eager to jump in.
The clincher for me though was the people involved. The team around this technology is one of the best I’ve seen. They are all top-level physicians and researchers. More importantly, they are committed to seeing this product come to market and making sure it delivers on it’s potential. As physicians, they see these injuries everyday and know the value the product can provide. As a group, they have a deep understanding of the biology and physics involved. They are scientists who don’t flinch from looking at their findings, even if the data isn’t what they’d initially hoped. They have a resilience that allows them to learn from setbacks and use that knowledge to improve the product. Seeing the improvements they made even while inside the university told me they had the right mindset to be involved in a startup.
T.H.E.: How has your background in start-ups and start-up funding helped you with Sense Diagnostics?
Kincaid: I think having done startups and seed investing has helped me in many ways. First, in planning the company and the development strategy. I’ve had the opportunity to see companies succeed and fail over the last eight years through my involvement with QCA, UC’s technology accelerator, Innov8 for Health and Biostart. Knowing where some of the land mines are is useful in the early stages.
Another benefit to my startup experience is in understanding how to present the opportunity to investors. The first company I did, we were able to get outside investors, but I have to admit, it was largely in spite of the way we approached it. We had a plan and knew the industry, but did not complete enough validation to really convince people. We were lucky enough to find investors that worked through our shortcomings to understand the opportunity. I was determined not to let that happen with Sense. We spent a lot of time preparing for the raise. We were able to do this by investing our own money in the company and being insanely frugal (“garbage picking” office furniture, renting as little space as we needed, using our own blood in our experiments rather than buying from a blood bank, begging favors from everyone I knew, etc.).
T.H.E.: What are the benefits of building a med-tech company in Ohio?
Kincaid: We’ve received support from a number of people in the Cincinnati and Ohio startup world. HCDC has been a huge supporter, allowing us flexibility in leasing space as we need it, introducing us to their contacts – especially in manufacturing and market research areas – advising us on funding strategy, etc. We received a grant from the Ohio Third Frontier Validation Seed Fund that extended our runway and helped us make some significant progress that attracted investors. The Third Frontier supports many of our investors as well. QCA, Accelerant and GCIC all have funds that the state supports to encourage early stage investment in high tech companies.
Cintrifuse is an organization that we’ve only begun to tap into, but they’ve already given us connections for our next round of funding and have connected us with some of their partners. I am looking forward to working with them more.
The Sense Diagnostics’ story is really the story of how the Cincinnati and Ohio startup support networks function. We’ve received advice, funding, technical support, flexible physical space, and market connections from a number of people and entities. The support and feedback has been phenomenal.
T.H.E.: What about the challenges?
Kincaid: In terms of challenges that come from being in Ohio, I don’t really see many. The one area where I see some opportunity is in direct support for very early stage companies. One example is in the area of grant matching. Kentucky, and other states, often will match Small Business Innovation Research grants issued by the federal government. Many high tech startups find themselves in the “valley of death” where they have a promising technology that has moved beyond the research stage at a university, but is not yet developed enough to draw private investment. In the past, many of these product ideas would die at that point. The federal government created SBIR grants to help these companies progress to the point where they can get private investors. By matching these grants, a state can leverage the federal resources to enhance the chances of getting out of the valley. Ohio does a number of things well, but I still see a number of technologies get stuck in no man’s land.
T.H.E.: How has QCA helped you with SENSE Diagnostic? Beyond the financial support?
Kincaid: Well before anyone thought about writing a check, QCA was instrumental for us. Rich Grant came in during UC’s accelerator and told us where we needed help. He introduced us to an electrical engineering firm that has been a core part of our team since 2013. Dan Geeding has been instrumental in making capital connections and introductions to the Cincinnati health care system. Bob Petrik gave our financial plan a thorough vetting, making a number of improvements along the way (as he always does). Roy Kulick has helped with feedback and suggestions on the direction for our development going forward. Jim O’Reilly challenged our thinking on regulatory path, which helped us better prepare for the FDA conversations. I could go on. There have been so many people inside QCA that have helped, and I don’t think a lot of companies realize what QCA offers. You’ve got 50+ successful people from all areas of business (finance, sales, technology, marketing, etc.) and each of them has extensive networks. If you ask, chances are someone in the group can help or can get you to someone who will.