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This LA Startup Just Raised $10M To Keep Our Brains Healthy

 

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With over 100 billion neurons currently in your brain, with a firing rate of 200 a second, we rely on our highly evolved brains for everything. This being the case, smart technology available to help anyone who is experiencing brain complications should be a top priority. Thankfully, Neural Analytics does just that. With a focus on stroke, trauma and dementia, the team is developing modern technology for breakthroughs in the medical field. With their beginnings in UCLA, the team has grown into a powerful force in promoting optimal brain health. The company has been approved by the FDA and received the CE Mark as they continue to insure a healthy brain for a healthy future.

LA TechWatch spoke with CEO Leo Petrossian about the company and their most recent round of funding.

Who were your investors and how much did you raise?

We just completed a new round of funding for $10 million. The investment brings Neural Analytics’ total funding to $27 million. Reimagined Ventures led the new round of financing. Ted Koutouzis, M.D. of Reimagined Ventures will join Neural Analytics’ Board of Directors. Neural Analytics has numerous investors from its inception whom have been instrumental to get us to where we are today. These investors consist, not only of organizations like Reimagined Ventures, but also numerous personal investments from individuals whom share our vision about brain health management.

Tell us about your product or service.

We have received both FDA clearance and CE Mark approval for our brain-monitoring platform called the “Lucid M1 Transcranial Doppler Ultrasound System.” The Lucid System is an all-in-one ultrasound system designed for measuring and displaying cerebral blood flow velocities and monitoring of patients with brain disorders. The Lucid System is currently available in the U.S. and Europe.

We are also conducting a feasibility study with the Erlanger Health System in Chattanooga, Tennessee to evaluate the Lucid System for patients suffering an acute ischemic stroke.

What inspired you to start the company?

Neural Analytics founders, Leo Petrossian, Robert Hamilton and Dan Hanchey, were introduced to leading-edge technology in the UCLA Department of Neurosurgery. After exclusively licensing the technology from UCLA, the team immediately began research and development efforts sponsored by National Science Foundation and National Institutes of Health funding. Neural Analytics has developed leading brain health technology and is in the process of commercializing products.

How is it different?

The Lucid System uses a type of ultrasound called Trans Cranial Doppler to assess the brain’s blood vessels from outside the body. This analysis is non-invasive, can be performed in the physician’s office, and can help the physician diagnose brain disorders, potentially without the need for additional, more invasive tests.

Many significant brain disorders, such as severe traumatic brain injury, are caused by blood flow disruption. The Lucid System is a battery operated medical grade tablet device designed to be moved easily throughout a medical facility in a range of settings that require the rapid assessment of blood flow in the brain to expedite treatment.

What market you are targeting and how big is it?

We are targeting and expanding the global brain monitoring market, which is currently projected to be valued at over $11B in 2020.

What’s your business model?

The Lucid System is currently cleared for sales in the United States and in The European Union under CE mark so we are focusing our commercial efforts in those regions.

Customers for our technology are typically vascular or stroke neurologists in both the in-patient and out-patient settings. At this point, we are seeing incredible demand for the technology and are enthusiastic about the opportunity to expand our commercial efforts as the year progresses.

What are the milestones you plan to achieve in the next six months?

This is an important year for Neural Analytics as we continue to service customers and grow the company to an international commercial organization. During 2017, we anticipate several significant milestones, including expanding our clinical studies programs for new disease states and applications in brain health. We also plan to build a commercial presence in regions outside the U.S. and Europe as we secure additional regulatory approvals.

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Where do you see the company going now over the near term?

Although we cannot discuss individual products until they are FDA cleared, we can highlight our ongoing development strategy. For too long, we have only had a limited understanding of the dynamics of brain health due to the limitations of and availability of appropriate diagnostic tools.

Our mission is to develop the future tools that will enable healthcare professionals to improve our understanding of brain health and the diagnosis of brain disorders. We hope to help pave the way for new innovation and significantly improve the outcomes of patients while reducing the high costs associated with brain care.

What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?

Avoid drawing comparisons between your company and other startups regarding funding as it’s not always indicative of how well a company is doing or will do in the future. Many startups have good margins and good cost of sales, but those benchmarks are not always calculated in the overall equation. My advice for other companies is to keep with their business model and continue to pursue objectives incrementally. The capital will come

Can you talk about the healthcare startup scene in LA?

When people think of Los Angeles, often Hollywood and the entertainment industry come to mind. However, Los Angeles has long been an entrepreneurial capital brimming with talent and innovative ideas. In fact, the wealthiest individual in LA, as highlighted in a 2015 Forbes article, is Patrick Soon-Shiong, who comes from the healthcare/pharmaceutical industry and not the entertainment industry. With leading medtech companies, world-renowned hospitals and universities, and an ideal climate, Los Angeles provides the perfect ecosystem for healthcare innovation. There is incredible diversity from pure technology and digital health to pharmaceutical and interventional devices. For example, at Neural Analytics, we are highly passionate about brain health management and the science of understanding it, which combines several elements from machine learning, robotics, and traditional medical technology.

What was the funding process like?

The funding process was difficult at times. We started out by meeting with a broad array of investors in our early stages of fundraising so we weren’t always pitching to our ideal audience. Fortunately, out of those early pitches, we made some great connections and met mentors in the venture space who were able to help guide us along in the process. Eventually, after several rounds of fundraising, we found our footing and we knew what to look for in potential investors – those who understand our business and share our passion for brain health management.

What are the biggest challenges that you faced while raising capital?

Just trying to get over some of the hurdles created by perception of medical technology and innovation. There have not been a lot of significant breakthroughs in diagnostics over the past 20 years so we have had to work hard to convince investors that our technology is indeed a radical new approach for stroke, Alzheimer’s disease and dementia. The majority of venture capital money is poured into biopharma for obvious reasons so we have had to convince investors that our approach will expand the market opportunity because our model is based in preventative care as well.

What factors about your business led your investors to write the check?

There were several factors including the following:

The FDA clearance and CE Mark approval for our brain monitoring platform, the Lucid M1 Transcranial Doppler Ultrasound System.

Our mission to develop the future tools that will enable healthcare professionals to improve our understanding of brain health and the diagnosis of brain disorders.

Our hope to help pave the way for new innovation and significantly improve the outcomes of patients while reducing the high costs associated with brain care.

What’s your favorite outdoor activity in LA?

I have several: paintball; hiking with my daughters; and the racetrack.

About the author: LA TechWatch

LATechWatch is a property focused on the Los Angeles technology, startup, and entrepreneurial ecosystem with a global readership of highly affluent and educated individuals across 200+ countries.

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