UC Founder Shiv Shukla Develops Device to Tackle Chronic Pain and Give Patients Hope

Fascinated by how pain works, Shiv Shukla switched his studies to neurology, graduated from UC Davis, and pursued research at UC San Diego to study chronic pain. After a breakthrough discovery, he began the journey to bring the technology to market. After a long, seven-year expedition including back and forth discussions with investors, cultivating a world-class advisory board, networking with thousands of people, self-reflection and growth, and 50 or so blown circuits in his apartment, Shiv is now leading NeuraLace Medical to raise a second round of financing for clinical trials and FDA approval. Driven by a passion to change the lives of millions suffering with debilitating chronic nerve pain, he’s on a mission to bring NeuraLace’s device to market and ultimately change the industry’s acceptance of chronic pain.

Tell us about your background and journey to entrepreneurship.

neuralace-medical.pngI’m Shiv Shukla, the founder & CEO of NeuraLace Medical. I did my undergrad degree at UC Davis in neuroscience and biomedicine, and after I graduated, I started doing research at UC San Diego. I was originally thinking of med school and became interested in pain after a stint volunteering at a drug rehab clinic. I found pain quite fascinating as a concept, particularly for trauma patients whose injuries had already been resolved but who still had pain – where was the pain coming from? So, I changed my degree to neuroscience and after my undergrad, started doing clinical research at UC San Diego in nerve pain and TBI (traumatic brain injuries) related headaches. During that time, I discovered a treatment through the mechanistic work I was doing with the support of pain specialist at UCSD & VA. Patients who had a shrapnel injury, for example, didn’t have the shrapnel anymore yet they still suffered pain; they tried many pain therapies, but nothing seemed to work which was frustrating for them and their physicians. That was the population I was targeting: patients with chronic nerve pain. I wanted to find a solution so that they could live again.

After discovering the treatment, we filed a patent with help from the University of California. My fellow researchers then moved to the next research project, but I decided to take our discovery to market and pursue it further. I thought it would take only three months to make a device: instead, it took three years to get to a proof of concept and well more than 10,000 hours.

How did your company come to be?

I went to engineering firms in San Diego to help develop the device and raised money in 2016 from local VC’s. We founded the company and are now raising another $2 million to get FDA clearance. We’re licensing the IP from the University of California, but there’s actually more to the story there.

I had started a different company in 2014 with a physician and fellow mentor with the intent of licensing the IP from UC and taking the technology to market. When it came time to raising funds, the expectations we had with regards to equity and time commitment were very different from the industry standard. For example, my partner was expecting to maintain a majority equity and work part-time, but investors look for “skin in the game” and wanted us to work full-time for a majority equity stake – for them, it was a risk issue. I’d say we were naïve as to the expectations and reality of being an entrepreneur with investors (definitely an education problem on our part). Having licensed the IP we intended to use, we had to transfer the IP back to UC San Diego, which took about a year. After that, I went back and re-licensed the IP from UC to start NeuraLace and begin raising funds.

What problem(s) are you tackling?

We’re tackling peripheral chronic neuropathic pain: pain that’s induced by trauma, chemotherapy, or diabetic neuropathy. That’s just for now; later we’ll move into other areas. The parallel side-effect of our solution is that it allows patients to come off pain medications. There’s no standard solution for chronic nerve pain, but most common are neuropathic medications, opioids, and narcotics. With our therapy, patients can go off other pain solutions: we’re basically the safest, fastest, and most effective therapy for chronic neuropathic pain.

What product or service have you developed?

We’ve developed axon therapy, a magnetic stimulation device mounted on a robotic arm that creates targeted magnetic pulses to activate peripheral nerve factors necessary to not feel pain. There’s a nerve active at a baseline level that’s consistently active for a person not in pain; but when trauma occurs, the trauma interrupts the nerve. If the trauma heals but the nerve is not restored, the brain can’t tell the difference from pre-trauma to post-trauma. At this point, the communication with the brain is malfunctioning. What our device does is essentially tell the brain that the nerve is functioning, and thus the pain goes away. It’s a question of communication with the brain: the communication was broken, doesn’t get repaired, so we essentially send messages to the brain that the nerve is ok, thus the pain goes away.

Pain is complicated and we still don’t completely know what’s going on. Physicians have multiple theories but there remains a lot of miscommunication in the field. We’ve discovered that when you explain the fundamentals of pain to a physicist rather than a physician, they see it as simple communication and messaging problems, so that’s what we tackled.

What makes you more valuable than other pain solutions?

We don’t have any direct competitors yet, but the question is what are patients doing to manage chronic pain? The answer is a lot of drugs since that’s what physicians are prescribing: opioids, narcotics, injections. There are also invasive surgical procedures such as radiofrequency ablation and spinal cord stimulation. Sometimes these treatments work, but when nothing works for a patient, NeuraLace is a great option. The challenge is finding the financial incentive for physicians. They’re financially incentivized to do spinal cord stimulation which provides about a $34,000 reimbursement in a few hours. Even ablation treatment for less than an hour pays $4,000-6,000. For a private pain physician, that’s your bread and butter.

Our goal is to make NeuraLace affordable for patients, but if our incentives aren’t aligned with those of a physician and patient, then we won’t be successful. We had to propose our solution to physicians in a way that they feel incentivized to suggest our treatment to their patients. It took us 7 years to figure this out! Since patients need reoccurring treatments, our model offers physicians ongoing continual revenue: we provide our device to physicians and patients have to come to their clinic to receive the treatment, meaning patients return on an ongoing basis. This doesn’t threaten other treatment options or cannibalize on them either.

What’s your business model?

We’re still working on commercialization and are currently leasing hardware for treatment with disposables being a source of revenue. The cost per treatment is $275, and for 16 treatments a year it’s $4,400.

What impact do you envision achieving?

There are currently 1.2 million chronic nerve pain diagnosis per year, the majority of whom will end up with their only option being narcotics. We’re trying to become the standard of care and help 4 million patients manage their chronic nerve pain annually.

Personally, the impact I’d like to have is to demonstrate that a condition that is considered “chronic” isn’t actually chronic. For those with chronic nerve pain, they’re told nothing can be done for their pain and they’re forced to live with a lower quality of life. When we change the idea that nerve pain is “chronic,” we give hope to patients that their pain can be treated. With our device, they have a 15-minute procedure once a month, and their quality of life is restored because their pain is diminished. We hope that our therapy translates to giving hope to millions of people and restoring their quality of life.

We want to disrupt the idea of chronic pain. The whole medical community has agreed that chronic pain is here to stay but we see chronic pain as a glitch in our hardware as humans. I want to crack this glitch and question whether or not something has to be chronic. I want to work on pain indications that are deemed to be chronic today: it’s a matter of questioning what is considered true and reframing it. If we can tackle the hardest type of chronic condition to manage, which is chronic nerve pain, then it’s easier to question other problems that are chronic and find solutions for them.

What’s your basic roadmap and what does the future hold?

We’re currently raising $2 million to complete device development for FDA clearance and clinical studies for adoption and reimbursement. Next, I’ll be raising a $5M Series A for commercial launch early 2020, then by 2022 we’re expecting to have $20-25 million in revenue, helping at least 10,000 patients.

What are the biggest challenges you’ve faced thus far and how have you overcome them?

I don’t have a co-founder, but I do have an amazing advisory board. NeuraLace is self-driven but community made. I’ve had many crucial conversations with advisors to take steps forward; without them, I wouldn’t be here today.

On the product development side, I’ve had to teach myself electrical engineering, hardware engineering, and all of the skills needed to build our product, which took me three years and I built it in my apartment. Talk about lean product development! We got through development and to proof of concept with $165K - normally it takes $1-10 million!

I started to develop a network and talk to investors, who would connect me with CEOs who would later connect me with engineers. With each person I met, I asked them to introduce me to two people they knew or the twp smartest people they knew in medtech. My connections on LinkedIn evolved from 300 to over 3,000 in the last seven years.

People were key, and more specifically, having the right people. I went to investors who told me to find an engineer and come back because I was the scientist. Then I built the product and they said, “go find a scientist and a businessman, you’re the engineer.” So, I learned the business side and they said, “go find an engineer and a scientist, you’re the businessman.”

I had to transition out of being a scientist. It’s painful to learn something completely new and fully adopt it. The hardest challenge was becoming a business person. Their incentives don’t necessarily seem aligned with the science or engineering side. It took a lot of support from investors and advisors, but at one point that wasn’t enough: I had to learn about myself, gain some emotional intelligence, kill my ego, overcome my resistance and ask for help on things I didn’t know, which was humbling and vulnerable. But every time I asked for help, I got more knowledge and more people on board. What resources within the UC system have been beneficial to you and why? Early on, definitely the physicians at UC San Diego were helpful, as was the animal research. Access to PhDs and MD talent as well as physical resources to conduct studies using Dr. Sorkin’s lab were helpful – we used UC MRIs and tons of resources. On the tech transfer side, I got a lot of guidance on how to start a business along with a ton of resources which helped me think in the right way and to customize the information to what I was doing. They also had classes on how to apply for NIH grants as well as early-stage business guidance and connection to programs. I have a mentor entrepreneur in residence at UCSD who has given a lot of coaching and help as well.

What’s one tip you’d give to entrepreneurs?

When looking for an advisor, look for recent and relevant experience with multiple demonstrated successes. It’s nice to have well-meaning people with well-meaning advice, but have they had recent and relevant success in industry? Find the folks who’ve had success and learn from them: that’s what I did, and it felt like cheating because you get all the answers of what worked. Those are the people you bring on your advisory board.

Are there any resources you’d recommend to fellow entrepreneurs?

Yes, absolutely! Standford has a book called Biodesign – that has been my bible for building the company over the last 7 years. It’s an amazing book, a great resource available to the public, and it’s provided the most accurate guidance from the medical side as well. Also, there’s a series on Youtube, “How to Start a Startup,” by the founders of LinkedIn and Y-Combinator. It is really helpful and every time I watch it, I learn something new.

What advice would you give to fellow entrepreneurs?

It’s important to do something you’re passionate about. For me, it was quite painful to transition out of a conventional pathway in academia and do something outside of my comfort zone. The only thing that can guarantee that you can do it well is passion. It was really hard to build a high-voltage circuit and it probably blew up on me 50-60 times. But then I realized that there was a possibility to change millions of people’s lives, which was more important than a little voltage problem. Also, passion drives persistence. There was a day when I knew I was the only person who believed in what I was doing… now, I’m grateful because I feel like half of San Diego believes in our technology.