Aclarion, Inc. (ACON) is a commercial-stage healthcare technology company that has developed a proprietary signal processing software to transform magnetic resonance spectroscopy (‘MRS’) data into clear biomarkers that can assist surgeons in optimizing clinical treatments. At the core of the technology is the conversion of MRS-produced signals into waveforms that identify the chemical composition of tissues. The biomarkers, licensed exclusively from the University of California, San Francisco (‘UCSF’), form the key inputs for the Company’s proprietary algorithms, which can determine if the scanned intervertebral disc has the chemical and structural characteristics consistent with pain. Accurate and reliable diagnosis of the specific spinal disc(s) that cause pain can lead to improved surgical outcomes in low back pain (‘LBP’)/discogenic LBP (‘DLBP’).
Magnetic resonance imaging (‘MRI’), the current primary diagnostic standard, only shows abnormal structures and dehydrated tissue, and cannot identify the specific pain-causing disc. For accurate pin-pointing of the pain-causing disc, a needle-based provocation discogram test (‘PD Test’) is in vogue, however, it is intrusive and unpleasant, requiring the patient’s subjective correlation of their experience in a back pain episode with the physician’s needle pricks in specific discs. Not only is the PD test painful but also has been observed to increase the rate of degeneration in previously normal discs. Another technology used for disc diagnosis is “SPECT-CT” that requires a CT-scan, an MRI and an injection of a radioactive dye aimed at binding to inflammatory markers, however, compared to MRS, it is less reliable and also involves extra cost and time apart from the risk of radiation exposure.
The Company’s NOCISCAN-LS is a first-in-class, evidence-supported, software as a service (‘SaaS’) platform that helps physicians distinguish the painful and non-painful spinal discs using a non-invasive and non-provocative MRS scan done in a conventional MRI setting.
The NOCIGRAM-LS is a lumbar spine scan report individualized to each patient with objective analysis of pain biomarkers, and easy to interpret NOCI+/NOCI- scores for each disc, highlighting present affected disc(s) as well disc(s) to watch for possible degeneration in the future.
(Image: NOCIGRAM-LS report; source: company website)
A clinical study published in the European Spine Journal in April 2019, illustrated that 97% of the patients met the criteria for “clinical improvement” when all the discs identified by the Company’s NOCISCAN-LS as consistent with pain (NOCI+) were included in a surgical treatment, compared to only 54% when the NOCI+ discs were not included in the surgical treatment. The study included 139 chronic LBP patients who collectively underwent a NOCISCAN-LS exam across 623 lumbar discs, however, the NOCISCAN-LS data was not used in surgical decision making. The results from this clinical study resulted in approval of four Category III codes for the Company’s technology by the CPT Committee in January 2021. The National Institutes of Health (‘NIH’) included the Company’s technology as one of the few technologies selected to participate in their $150 million Back Pain Consortium (‘BACPAC’) research program to address the need for effective and personalized therapies for chronic low back pain.
Aclarion has an intellectual property (‘IP’) portfolio consisting of 21 U.S. patents, 17 foreign patents, 6 pending U.S. patent applications, and 7 pending foreign patent applications, related to aspects of the NOCISCAN-LS product suite as well as the related disc MRS exam itself, and to broader applications of the technologies to other applications for MRS. These include patents assigned to Aclarion and patents exclusively licensed from the Regents of the UCSF.
The Company was formed in 2008 as Nocimed, LLC, converting to Nocimed, Inc. in 2015. On 12/3/2021, the Company changed its name to Aclarion, Inc. On 1/5/2022, the Company filed a Form S-1 registration statement with the U.S. SEC for an initial public offering (‘IPO’) of unspecified number of units, each comprising one share of its common stock and one warrant to purchase one share of its common stock, and issue of common stock for exercisable warrants. The units have not been priced yet, but the registration is for an approximate aggregate amount of $48.3 million. The Company has applied to list the common stock and warrants at NASDAQ under the symbols “ACON” and “ACONW” respectively, and the offering will be consummated only if the listing is approved. The Company anticipates that the net proceeds from the IPO, together with its existing cash, cash equivalents and securities available for sale, will be sufficient for a cash runway of at least 12 months, but the Company will need additional funding to complete the development of its full product line and scale products in a market-appropriate manner.
The Company’s MR data post-processing products currently depend on compatible use with only a limited number of MR scanners that are provided only by one, third-party scanner vendor – SIEMENS, and/or other MR service providers who own and operate the SIEMENS scanners, maintaining operating configurations supporting compatibility with its products. There is also the risk of its products becoming incompatible with revisions made by the original equipment manufacturer (‘OEM’). The Company has a collaborative relationship with SIEMENS since 2011 and a collaborative agreement since 2017, but it is neither exclusive nor does it involve any fee-sharing or royalty payments.
The Company’s success depends on widespread adoption of its technology, which is highly niche-based in the advanced diagnosis and management of spine and back pain, particularly for diagnosis of painful discs that cause DLBP. The adoption of its technology is also highly dependent on clinical data, and availability of financial coverage and reimbursement from third-party payors. While the Company has published positive clinical data from an Institutional Review Board (‘IRB’) and has secured certain reimbursement codes against which the use of its products can potentially be billed, it does not yet bill any third-party payors directly. While the Company’s Category III CPT Codes became effective from 1/1/2021, it is required to continuously demonstrate the “clinical need” and “clinical effectiveness” of the use of its technology, during a five-year period. The Company needs to build substantially on its early clinical evidence by tracking many more patients.
The majority of the Company’s revenue will be based on sales of software products that may not be commercially available for many years, if at all.
The Company is highly dependent on its senior management and key personnel, has “at-will” employment arrangements with its employees, and also does not maintain “key man” insurance policies on any individuals or employees.
The Company is an “emerging growth company” and a “smaller reporting company” and has elected to take advantage of reduced disclosure obligations and reporting requirements in its public filings.
The Company has incurred losses since inception in 2008 and accumulated a deficit of approximately $28.5 million as of 9/30/2021.
Aclarion’s artificial intelligence (‘AI’)/machine learning (‘ML’) based SaaS technology certainly has significant advantages over the current standard disc diagnosis solutions – MRI, PD-Test, and SPECT-CT. It does seem that NOCISCAN-LS has the potential to become the standard of care in disc diagnosis prior to a surgical intervention in the treatment of DLBP, as well as other spine and neck surgeries.