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VCs target pain treatments, but without the opioids

Ken Hood, managing director at FusionX Ventures, knows how easily good people can fall into the addiction trap. Not long ago, he spent a week in hospital due to complications from knee surgery.

“I can’t tell you how many times a nurse came in to ask if I was in pain,” he says. “If I responded yes, they’d just try to push more painkillers on me. I turned them down, but most people do not. It’s not hard to see how this whole addiction problem starts.”

Opioid overdoses are now the No. 1 killer of Americas under 50, causing more deaths than car crashes and guns each year, according to The New York Times.

The scary thing about the opioid epidemic is that many people become addicted after getting the drugs legally from their doctors, usually to treat some form of pain.

In fact, prescription painkillers are responsible for 2 million Americans being addicted to drugs, the American Society of Addiction Medicine reports. That’s more than the number of people hooked on cocaine and heroin combined.

Today, Hood is at the forefront of the fight against opioid addiction. And last year, his firm led a $2 million investment in NeuraLace Medical, one of several new companies focused on developing non-opioid pain-reduction treatments.

Opioid Pain VC Venture
Ken Hood, managing director, FusionX Ventures.

NeurLace, for its part, focuses on patients suffering from long-term nerve pain, which can diminish their quality of life and lead to opioid dependencies. The company’s first commercial product, Axon Therapy, approaches chronic-pain management with pulsed magnetic fields targeted to stimulate nerves. With this method, Axon aims to reactivate and restore damaged nerves’ ability to manage pain.

“With NeuraLace, we’re at the right place at the right time,” Hood says. “Opioid deaths are spiking right now. Our thesis at FusionX is to solve big problems with solutions that are non-invasive and that leverage technology. That is exactly what Neuralace does. It is non-invasive and, in early tests, there are no known side effects.”

The opioid epidemic is costing the U.S. economy more than $500 billion annually, according to the White House Council of Economic Advisers. Most of that cost is attributed to healthcare and criminal-justice spending, as well as lost productivity. So any company that can help solve the problem and reduce those costs will be extremely valuable.  Few understand that better than venture investors.

The opportunity for a company like NeuraLace is huge, insists Hood. He says the addressable market for the company is in the $10 billion range, once the system is fully developed and approved by the FDA, which Hood says should be about 18 months away.

The key, he says, is “democratizing access” to the system. By way of example he cites MRI machines, which are not easily accessed by patients. These machines are very expensive and tend to be housed in specialized facilities, which tends to restrict access.

By contrast, he says, NeuraLace wants to distribute its technology as close to the patient as possible, while still being under the oversight of the physician.

As a result, NeuraLace’s initial target market is pain clinics because every day they have patients visiting them with chronic nerve problems and they have a pressing need to provide non-opioid solutions. The idea is that patients will come in for a 20-minute treatment every few months or so.

“NeuraLace could be a complete alternative to opioids,” he says. “Or if someone is on opioids today, they can try this system and throttle back their usage.”

Another venture-backed company in the pain space is SPR Therapeutics, which last September raised $25 million in Series C funding led by an undisclosed family office and Frontcourt Ventures.

SPR has gained FDA clearance for its neurostimulation device, which generates low-voltage electrical pulses to activate nerves and provide targeted pain relief without opiates or surgical intervention.

And early this year, Centrexion Therapeutics raised $67 million in Series D funding, led by New Enterprise Associates, for its non-opioid, non-steroidal approach to chronic pain.

The company has developed a synthetic form of capsaicin, a natural analgesic compound found in chili peppers, which is designed to be injected directly into a painful joint. In clinical trials, a single injection has provided quick-onset pain reduction in patients with moderate to severe arthritis pain, according to the company.

Additionally, Vapogenix in December pocketed $8.2 million in Series C funding from Pamoja Capital and others for its topical, non-narcotic pain-relief alternative to opioids. Vapogenix’s technology is based on findings that local application of so-called volatile anesthetics can reduce pain. Currently, VAs are used only unformulated by inhalation for general anesthesia.

The company says it has formulated these VAs into topical gels and liquids and intends to treat various painful conditions including wounds, combat-related injuries, osteoarthritis, and muscular and inflammatory conditions.

Some startups are also using virtual reality to treat chronic pain.

FirstHand Technology has developed a VR game called Cool! The company claims it could potentially reduce a patient’s pain level by up to 60 percent.

“We need more non-drug alternatives to opioids, and VR is definitely one of them.” says FirstHand CEO Howard Rose. “Take a hospital situation where patients have a drip and can choose how much morphine they can take. VR can reduce their reliance on medication. And it stands to reason. If I’m in VR and I’m feeling good and engaged, at least the time I’m doing that, I’m probably not hitting the pump.”

Carolina Brochado, a partner at Atomico, says her firm looks for “large pain points” that can be solved with technology. And pain itself just happens to be one of the very largest.

More than 100 million Americans suffer from chronic pain, more than the total affected by heart disease, cancer and diabetes combined, the Institute of Medicine reports. And the costs are enormous, totaling about $600 billion a year in medical treatments and lost productivity, the IOM says.

Brochado says many pain treatments, such as surgery and medication, are ineffective and end up causing even more damage. That’s why Atomico recently led an $8 million investment in Hinge Health, which is offering a new way to tackle chronic back and joint pain.

Hinge Health works with companies that want a non-opioid pain solution for their employees.

Employees participating in the 12-week Hinge program receive a kit that contains two Hinge bands with motion sensors and a tablet loaded with its software. An online coach guides the user through 15-minute personalized workouts three times a week, with the wearable sensors helping the user through each movement.

“The RoI to the employer for a solution like Hinge is really quite clear,” Brochado says. “A single back surgery costs about $100,000, so if Hinge can save them one back surgery per cohort, the solution more than pays for itself.”

She adds that about $100 billion is spent on musculoskeletal surgery every year nationwide and about 54 percent of the workforce has some sort of MSK pain.

“If you look at employer spend on MSK, it’s huge,” she says. “It’s bigger than diabetes, it’s bigger than cancer, it’s bigger than a lot of other diseases that are more top of mind.”

Brochado says Hinge has made steady progress penetrating employer health plans because there is no good solution to this very costly problem.

“Throughout the medical field, we are starting to see a move toward solution that are based purely on technology and don’t involve any drugs,” she says. “It’s clear that chronic pain has now become ripe for technology disruption.”

Tom Stein is a Palo Alto, California-based contributor. He can be reached at

Photo of various pills courtesy of Reuters/Jacky Naegelen.