Sale of intellectual property asset mcTMS
Gerbsman Partners has been retained by Rio Grande Neurosciences, Inc. (RGN) to solicit interest for the sale of RGN multicoil transcranial magnetic stimulation (mcTMS) Intellectual Property and Assets (“RGN Asset”).
Headquartered in Santa Fe, New Mexico, RGN is a medical device company that develops non-invasive brain stimulation (NIBS) technologies for use in treating neurological and psychiatric conditions and enhancing cognitive performance. $30MM has been invested in the mcTMS IP and technology development.
RGN has made a strategic decision to sell its TMS assets. The company has been in discussion with another party that has expressed an interest in acquiring the Company’s PEMF and TES assets and so has decided not to offer them for sale. The Company had previously expressed a desire to sell all three assets but withdrew the offer both because baseless claims were made that another entity had a prior right to buy the Company and of the pendency of an offer from a legitimate buyer to purchase all the the assets. The entity claiming to have a prior right to purchase the Company has withdrawn that claim, and the pending offer to purchase has narrowed to PEMF and TES.
IMPORTANT LEGAL NOTICE:
The information in this memorandum does not constitute the whole or any part of an offer or a contract.
The information contained in this memorandum relating to the RGN’s Asset (as defined herein) has been supplied by RGN. It has not been independently investigated or verified by Gerbsman Partners or their respective agents.
Potential purchasers should not rely on any information contained in this memorandum or provided by Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.
Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, and completeness of any information provided in connection herewith and (ii) do not accept liability for the information, including that contained in this memorandum, whether that liability arises by reasons of RGN’s or Gerbsman Partners’ negligence or otherwise.
Any sale of the RGN Asset will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either expressed or implied, of any kind, nature, or type whatsoever from, or on behalf of RGN and Gerbsman Partners. Without limiting the generality of the foregoing, RGN and Gerbsman Partners and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the RGN Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.
This memorandum contains confidential information and is not to be supplied to any person without Gerbsman Partners’ prior consent. This memorandum and the information contained herein are subject to the Confidential Disclosure Agreement attached hereto as Appendix A.
Rio Grande Neurosciences, Inc. (RGN), a Santa Fe, New Mexico based medical device company, has developed a suite of non-invasive brain stimulation (NIBS) technologies for use in treating neurological and psychiatric conditions and enhancing cognitive performance. The NIBS technologies, also called electroceuticalsTM, include a multicoil transcranial magnetic stimulation (mcTMS) device.
Multi-coil TMS, IP from Stanford University and originally developed by Cervel Neurotech, involves selectively modulating brain circuit nodes. This is accomplished with an array of coils that steer induced electrical currents so as to optimally modulate targeted brain regions. Each magnetic coil is independently positioned and powered, thereby steering the electrical current toward unique brain areas not reachable by single-coil devices RGN’s mcTMS assets include a sought-after intellectual property position for TMS with multiple coils and strong clinical data in the areas of depression and pain. A complete FDA 510k application for treatment-resistant depression has been compiled.
Founded in 2011 as a start-up company with support from a Los Alamos National Labs (LANL) Venture Accelerator award, RGN has raised $6.2 million over 5 years of capital financing. Over $30 million has been invested into the development of mcTMS over time.
RGN believes its mcTMS assets are attractive for a number of reasons:
1. RGN’s intellectual property position for mcTMS covers the use of TMS with more than one coil, a position sought by single-coil TMS manufacturers.
2. mcTMS has advantages over single coil TMS, such as the ability to target multiple brain regions simultaneously or in sequence and to steer current to brain areas not addressable by single-coil approaches (e.g., deeper brain structures)
3. mcTMS has been shown to significantly reduce treatment resistant depression.
4. mcTMS treatment response rates were found to be markedly higher than that reported by single-coil TMS approaches for treatment-resistant depression.
5. Clinical studies (Stanford University) have shown that mcTMS can markedly reduce both acute and chronic pain.
6. Ongoing research at Stanford University has demonstrated proof of principle for a novel mcTMS pulsing method that can enhance plasticity (RGN-owned IP), a foundation for next generation TMS methodology that may be far more efficacious and require fewer treatments.
Impact of Technology on the Market
RGN’s mcTMS device offers a unique value proposition
1. RGN owns the only multicoil TMS device and the multicoil approach has a number of advantages over single coil TMS devices.
2. Single coil devices exhibit either shallow and focused stimulation (small diameter coils) or deep and diffuse stimulation (large diameter coils), but cannot stimulate deeper brain structures with selectivity.
3. Multicoil TMS employs an array of coils that steer induced electrical currents so as to optimally modulate targeted brain regions not reachable by single-coil devices. This approach has been shown to be clinically effective in depression and results in higher treatment response rates than single-coil TMS devices.
4. RGN’s IP position prevents competitors from using multiple coils.
5. New data suggest that a novel multicoil TMS pulsing sequence can enhance plasticity (RGN-owned IP), an approach that may result in a next generation TMS methodology that could dramatically increase efficacy and reduce treatment duration compared to current standards.
6. RGNs novel mcTMS business model is expected to capture significant market share and put pressure on single-coil competitors.
Intellectual Property Summary
RGN has an expansive portfolio of intellectual property that covers important methods and uses of NIBS. At present, RGN has (U.S.) 13 issued patents, 8 pending patents for mcTMS (some of which are licenses from Stanford University that are assignable). More detail can be found in Appendix B. The portfolio represents a broad array of strategic variables including:
1. Device for selective deep brain stimulation via multi-coil magnet arrays.
2. Methods for selectively modulating deep areas of the brain with shaped magnetic fields, using sulci as pathways for current flow.
3. Shaping of pulsed magnetic field is changed by altering the polarity of individual magnets with an array.
4. Use of different pulse rates from individual coils in one array and latencies between their discharges to achieve specific neuromodulation effects.
5. Network-based deep brain stimulation using multiple pulsed magnetic sources.
RGN’s mcTMS Asset
1. Patents, patent applications, and trademarks
2 Technology addressing the estimated the multibillion dollar global markets for treating depression
3. mcTMS clinical trial data for drug-resistant depression and pain
4. Unique and clinically relevant patient data
5. Next generation product designs
6. Product cost reduction designs
7. Device and component inventory
8. Intellectual capital and expertise
9. Complete FDA 510k application for treatment-resistant depression
The sale of the mcTMS asset is being conducted with the cooperation of RGN. RGN and its employees will be available to assist purchasers with due diligence and a prompt, efficient transition to new ownership. Notwithstanding the foregoing, RGN should not be contacted directly without the prior consent of Gerbsman Partners
Steven Gluckstern, Ed.D., MBA – President & CEO
Steven has served as RGN’s president and CEO since 2011. Previously he has served as Chairman and CEO of Ivivi Health Sciences, Zurich Scudder Investments, and Centre Reinsurance.
Blake Gurfein, Ph.D. – Chief Science Officer
Blake is a neuroimmunologist and faculty member at the University of California San Francisco. Blake worked with RGN as a consultant from 2013-2014 and joined the company as Chief Science Officer in 2014. In this role, Blake oversees basic science and clinical research activities, manages staff, and interfaces with the medical advisory board. Blake has 15 years of experience in neuroscience and immunology research and has been involved in the design, development, and preclinical/clinical investigation of medical devices.
Sean Hagberg, Ph.D. – Chief Strategist
Sean co-founded RGN in 2011 and in 2004 co-founded Ivivi Technologies, which developed RGN’s PEMF technology. Sean is a faculty member at the University of New Mexico and served as Chief Science Officer of Ivivi and led the scientific and clinical research program, including several first-in-human RCTs with using PEMF. Sean has been involved in all aspects of PEMF IP development, testing, basic science through clinical trials and regulatory processes.
Michael Weisend, Ph.D – Senior Scientist
Mike is a neuroscientist and faculty member at the University of New Mexico, Wright State University, and The Mind Research Network. Mike consulted for RGN from 2011 to 2015 and joined as a senior scientist in late 2015. Mike has 25 years of experience in neuroimaging, brain stimulation, and device development with emphases in memory, epilepsy, mental illness.
Peter Schwartz, Ph.D. – Director of Engineering
Peter is an engineering executive with a background rooted in science, and he has worked with RGN since 2015, spearheading the mcTMS 510(k) effort. Peter has 20 years of experience in research and development of capital equipment ushering inventions from the laboratory through commercialization.
Bret Schneider, M.D. – Senior Scientist
Bret is the principal inventor of multi-coil TMS and has 25 years of experience in neurotechnology development. Bret is also a Consulting Associate Professor of Psychiatry at Stanford University School of Medicine and a practicing psychiatrist
Board of Directors
Steven Gluckstern, Chairman: CEO, Rio Grande Neurosciences
Stephen Juelsgaard, D.V.M., J.D.: Former General Counsel, Genentech
John Wilkerson: Managing Director, Galen Partners
The Bidding Process for Interested Buyers
Interested and qualified parties will be expected to sign a Confidential Disclosure Agreement (attached hereto as Appendix B) to have access to key members of management and intellectual capital teams and the due diligence “war room” documentation (“Due Diligence Access”). Each interested party, as a consequence of the Due Diligence Access granted to it, shall be deemed to acknowledge and represent (i) that it is bound by the bidding procedures described herein; (ii) that it has had an opportunity to inspect and examine the RGN Assets and to review all pertinent documents and information with respect thereto; (iii) that it is not relying upon any written or oral statements, representations, or warranties of Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and Gerbsman Partners (and their respective staff, agents, or attorneys) do not make any representations as to the accuracy or completeness of the same.
Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the RGN Assets. Each sealed bid must be submitted so that it is received by Gerbsman Partners no later than Tuesday April 18, 2017 at 3:00pm Pacific Standard Time (the “Bid Deadline”) at 211 Laurel Grove Avenue, Kentfield, CA 94904. Please also email firstname.lastname@example.org with any bid.
Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase. All bids must be accompanied by a refundable deposit in the amount of $200,000 (payable Rio Grande Neurosciences, Inc.). The wiring instructions for the deposit will be sent at a later date. The winning bidder will be notified within 3 business days of the Bid Deadline. The deposit will be held in trust by RGN’s counsel. Unsuccessful bidders will have their deposit returned to them within 3 business days of notification that they are an unsuccessful bidder.
RGN reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale. Interested parties should understand that it is expected that the highest and best bid submitted will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.
RGN will require the successful bidder to close within a 7 day period. Any or all of the assets of RGN will be sold on an “as is, where is” basis, with no representation or warranties whatsoever.
All sales, transfer, and recording taxes, stamp taxes, or similar taxes, if any, relating to the sale of the RGN Assets shall be the sole responsibility of the successful bidder and shall be paid to RGN at the closing of each transaction.
For additional information, please see below and/or contact:
Steven R. Gerbsman