NeuroDX, a Wall Street medical device company, is marketing a solution to a problem that is little known to most people, but which is all to familiar to the 1 million or so Americans who have hydrocephalus — or water on the brain.
Hydrocephalus is a buildup of cerebrospinal fluid in the brain, and if untreated it can lead to brain injury or death. It can be a condition from birth, or it can occur because of an injury, a tumor, or an infection. Since the 1950s, the standard treatment for it has been to install a long plastic tube — a shunt — to divert excess cerebrospinal fluid (CSF) to another part of the body, such as the abdomen, where it can be safely absorbed.
Shunts work well most of the time but they are imperfect. From time to time they can become clogged or otherwise fail to function. In children, this can be because they were outgrown. Most people who have shunts have them operated on several times during their lives. (Although the word is similar, shunts are different from stents. Like stents, shunts are used to carry fluid from one area in a body to another. However, the most common kind of stent is a much shorter mesh tube used to reinforce weak arteries or expand clogged arteries.)
If you have a shunt and you get a headache, it could mean one of two things. It could mean that the shunt has failed and that CSF, the liquid that surrounds the brain, is not draining properly, and that the increased pressure inside your head will cause nausea, vomiting, seizures, and even death, unless a surgeon fixes the shunt. Or it could mean you have a normal headache and you’ll be fine. How to tell the difference? That’s a bit tricky, but NeuroDX, a small biotech that recently relocated to Research Park in Princeton, is developing a new and surprisingly simple tool for doctors to do just that.
Until recently, there were few ways to determine whether or not a shunt was working properly since the symptoms of shunt failure are so non-specific. For children, this often meant a trip to an MRI machine, a costly procedure that also subjected the child to a lot of radiation, and maybe an invasive needle puncture, just to be sure.
In 2002 Dr. Samuel Neff, a neurosurgeon working at the St. Christopher’s Hospital for Children in Philadelphia, wondered if there were a better way to do it. He had a 10-year-old nephew, Spencer, who often faced frustrating uncertainty about whether his shunt was working. Neff invented and began to develop an ingeniously simple device that would replace the X-rays, MRIs and poking.
The device was based on an ice cube.
All a doctor had to do was hold an ice cube at some point high on the shunt. His device, the ShuntCheck, was held against the skin near the shunt and measured the temperature of the fluid in the tube. If the fluid was cold past the shunt, then it was working. If it was still warm, then it must be clogged. Neff built a prototype of the device in his home shop and tested it on Spencer.
Working at an office in the University City Science Center, Neff worked to get the device patented and approved by the FDA, but the work was proceeding slowly. Neff’s work on the device came to an abrupt end in 2006 when he died of a heart attack while watching television.
Neff’s death was not the end of the story of the ShuntCheck. His colleagues at the Science Center saw merit in the idea and tried to continue developing it. The president of the science center contacted Frederick Fritz, a serial entrepreneur of medical device companies, to spin off the project into its own company, and NeuroDX was founded. The company recently opened an office at 324 Wall Street.
“We basically made it a bit more robust and much more user friendly,” Fritz said. “And thanks to National Institutes of Health grant support, we did a large clinical study to quantify its diagnostic accuracy and diagnostic utility.”
Fritz says the device is now cleared by the FDA, and the company is halfway through a followup study further validating the ShuntCheck’s usefulness after some improvements made in light of the results of the first study. The five-person company is preparing to sell the ShuntCheck to a niche market of surgeons that Fritz estimates is a market of tens of millions of dollars. Of the small core team, most are involved in research and development, while Fritz focuses on marketing. He has hired independent sales reps for the northeastern U.S. and is working on staffing up to cover the rest of the country. “They are basically getting exposure and making contact with neurosurgeons,” he says.
It won’t be the first time Fritz has taken a novel medical device to market. He grew up in Chicago where his father was a self-employed auto mechanic and his mother was a secretary. He studied engineering at the University of Illinois, and then went to Harvard to get an MBA, graduating in 1974.
That same year, he started his career at Quaker Oats in the consumer package goods marketing department before being recruited by Schering Plough’s Wesley Jessen in 1985 to market Durasoft Colors, the “brown eyes blue” contact lens. He was later promoted to manager of Schering’s over-the-counter pharmaceutical business and the podiatric products division. After a stint as president of Coleman North America between 1995 and 1997, Fritz entered the entrepreneurial world.
In 1997 Fritz became CEO of a small startup tech company called Songbird Hearing. The company was a spinoff from the Sarnoff Research Center on Route 1 that had located to George Street in New Brunswick. There, Fritz planned to revolutionize the world of hearing aids. Traditional hearing aids are custom-made for users and cost thousands of dollars. Songbird was going to sell cheap disposable hearing aids. Who would want to pay thousands for a custom hearing aid, when the model made by songbird cost $30?
Fritz says the company achieved the savings by designing custom microphones, speakers, and batteries. “We had to develop high-speed automated manufacturing,” Fritz says. “As a result of the cost of components, and eventually the cost of assembly, we were 60 times cheaper than a traditional hearing aid.”
Unfortunately for Songbird, the underlying business model turned out to be flawed. The company planned to sell the cheap hearing aids via audiologists, but the sales pitches fell on deaf ears. “Hearing aid dispensers were not at the time particularly receptive to the idea of a disposable hearing aid,” Fritz said. “So we tried alternative channels of distribution.”
Fritz left Songbird to pursue his next project, and his successor built consumer-facing “Songbird Hearing Centers” where customers could buy the hearing aids directly. But those didn’t work out either, and the company now exists only as an Internet retailer. Fritz was left to contemplate the business lessons of the failure.
“Probably the most important thing was we ramped it up too quickly,” he says. “We should have spent more time in early market testing to determine that the traditional channel wasn’t really using the product as we had envisioned. We gained rapid distribution and rapid trial, but we didn’t see the kinds of repeat customers we were expecting, and that was the key to the business model.”
His next company, Valeo Medical, which made a blood test for endometriosis — a condition in which uterine tissue grows outside the uterus — fell flat for another reason: its technology didn’t work. He joined NeuroDx in 2006, and so far the company has much brighter prospects. NeuroDx was located in Neshamminy, Pennsylvania, and later in Bensalem, before moving to Wall Street in June to be closer to Fritz’s home.
The initial research and development work on ShuntCheck was funded by venture capitalists, and in 2011 the company received a $3 million NIH grant to test the device. The resulting study was led by Dr. Joseph R. Madsen of the Children’s Hospital of Boston and held at several hospitals around the country. The device was tested on 100 shunted patients, and it led to some surprising results. As it turned out, the device was able to detect whether cerebrospinal fluid was flowing through the shunt as it should. But the study revealed that sometimes a shunt could be working perfectly, but there could be no flow for the ShuntCheck to detect at the time.
“This unexpected finding makes thinking about the problems of children with shunts more complicated than we might have hoped,” Madsen wrote in a blog post. “Like many new kinds of data about patients, we need the numbers, but we also need clinical experience to know how to interpret the numbers in each patient. Measuring shunt flow in hydrocephalus does not instantly tell us who needs surgery — but it surely is important information that will take some time to sort out.”
This finding, which was replicated in one smaller study, led NeuroDX to develop another device, called the ShuntFlow, that works in conjunction with the Shunt Check. Using a second $1 million NIH grant, made in 2013, the ShuntFlow is placed against the location of the shunt, and vibrates, causing a temporary increase in CSF flow through the shunt, making it possible to detect whether the shunt is working or not.
A second study is under way, of 400 pediatric patients, that will help doctors better use the ShuntCheck. Fritz says the company now has enough funding from the NIH and investors to finish the trial and launch the product.
Fritz says the results of the trial have been good so far, even though it is only halfway done. He says the preliminary data shows that surgeons using the device were able to rate 55 percent of children in a low-risk group as “unlikely” to need surgery, versus an expected rate of about 15 percent. To Fritz, the preliminary data is a positive sign that doctors can successfully avoid invasive tests by using ShuntCheck.
“It does look like ShuntCheck will prove out to be a very attractive alternative to CT/MRI scans within that group,” he said. “Among sicker kids, it looks like it’s best to use ShuntCheck in combination with CT or MRI together to give a much more accurate and reliable answer.”
Fritz says the company has a good chance of bringing its product to the marketplace now. In the long run, the path for most small medical device companies is to be acquired by a larger company, so if ShuntCheck is successful, NeuroDX will most likely be sold.
If that happens, the investors can thank taxpayers for allowing the company to survive. NeuroDX weathered the financial crisis of 2008 and 2009 because of small business-oriented SBIR grants from the NIH.
NeuroDX is currently developing a future product to non-invasively measure pressure inside of a patient’s skull.
The ShuntCheck now has FDA approval, a large study under way, and moreover, Fritz says, he believes it’s something that the market truly wants.
“It’s something neurosurgeons are asking for,” he says.
Moreover, he says, it’s something the patients want as well.
“I’ve met many people through ShuntCheck, and I know a few people personally, with shunts. Their reaction to ShuntCheck has been very favorable.” Fritz says he has gotten an especially positive reaction from the parents of the children participating in the clinical trial, who have to be asked for permission in order for the kids to participate. “The parents are really excited about this because it represents a non-invasive test that can act as an alternative to existing tests.”
NeuroDX, 324 B Wall Street, Princeton 08540; 609-865-4426; Frederick J. Fritz, president and CEO. www.neurodx.com.