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Hubly Surgical

Cranial & Orthopedic Platform Drilling Technology

USA, Illinois
Market: Mechanical engineering, Medicine
Stage of the project: Prototype or product is ready

Date of last change: 31.03.2021
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Idea

Hubly Surgical is a cranial/orthopedic drilling solution fixing the most common neurosurgery’s 20% failure. Our medical device startup is composed of a stellar team including two neurosurgeons with MBAs, two med device engineers, and a software engineer. We have built a next-gen cranial drill in a market ripe to be overtaken. The product does not require a heavy FDA approval process as a Class II 510(k). And it’s an incredibly significant $4B market with little competition. We have grants from the National Science Foundation and partnerships with Stanford and Northwestern.

Current Status

Fully operational prototype, human cadaver studies conducted, pig skull studies conducted. FDA Clearance is Class II 510(k)—we have begun preparing our 510(k) proposal and expect to submit in 6-8 months. Then, it will be a 4-6 month turnaround to FDA Clearance and launch.

Patents: Two non-provisional patent applications filed with Patent Cooperation Treaty (one search report received with favorable findings).
Partner: Northwestern Hospital who have invested $50,000 worth of resources in our company (cadaver lab space and testing). Expected first customer.
Lead investor: First Fund Venture Capital

Market

Initially, we expect our device to be primarily used by large health systems that have neurocritical care capabilities given the indications for external ventricular drain (EVD) placement. We will first target academic institutions to help build momentum and to create research on new indications of use. We ultimately plan to expand the use of our device beyond EVD placements, so our market could expand to other health systems and providers.

As with most surgical equipment, we expect hospitals to have stakeholders from a variety of backgrounds who will be involved in the decision to purchase our product. Oftentimes, larger hospitals will have a purchasing manager who pulls input from a variety of stakeholders around the hospital. These may include physicians, directors of materials management, directors of surgical services, CFO’s, and CEO’s. We are prepared to enter into discussions with individuals from all of these backgrounds and will tailor our discussion based on the individual’s background. The end user will be the physician placing the EVD, which is most commonly either a neurosurgical resident or the neurosurgeon on-call.

Key opinion leaders in both neurosurgery and general surgery, including the Vice Chairs of Neurosurgery at Northwestern Hospital, are excited to use our product once we achieve regulatory clearance. We will first launch at Northwestern Hospital and Stanford Hospitals. These are two of the top five American institutions for neurosurgery, yielding some of the highest numbers of annual neurosurgical procedures, and each have a Hubly leadership team member working as a neurosurgeon.

Problem or Opportunity

Patients with hydrocephalus, traumatic brain injury, intracranial hemorrhage, cancers of the nervous system, brain tumors, epilepsy, and subdural hematomas often undergo surgical treatments which rely on intracranial access. Intracranial access today is performed both inside (180,000 procedures U.S. annual) and outside (20,000 U.S. annual) of the operating room. The current bedside procedure relies on an inaccurate, hand-crank drill deficient of any safety features. This shortcoming is manifest by the 40% misplacement rate of catheters during intracranial access procedures and the 3-attempt average for functional catheter placement. 50% of bedside and 10% of operating room intracranial access procedures yield patients’ suffering from infection, hemorrhage, stroke, neurological injury, and death. Our company is solving the problem of high failure rates for intracranial access procedures both inside and outside of the operating room.

Solution (product or service)

Hubly Surgical is a cranial and orthopedic platform tech drilling solution. We are first advancing intracranial access, for which 205,000 life-saving procedures are performed U.S. annual...with 20% failure. The Hubly Drilling System is designed for safety, saving lives and hospitals billions through reducing complications. Our products follow a Class II 510K regulatory pathway, and we’re currently in cadaver studies. Hubly is run by neurosurgeon serial entrepreneurs and lifelong medical device engineers. We are also partnered with Northwestern and Stanford Hospitals for testing and piloting our solution.

The patent-pending Hubly Drilling System - innovative both bedside and in the OR - includes (1) entirely mechanical plunge prevention; (2) battery power — rather than wired, electric power as in the operating room; (3) hardware catheter guidance utilizing the proven Ghajar guide technique, which has been proven to facilitate accurate freehand placement; and (4) hardware drilling path guidance. Hubly’s Drilling System could save 15,000 lives each year through catheter guidance alone and also eliminate plunging into brain tissue, which in total, costs the U.S. healthcare system $4 billion annually.

Competitors

COMPETITIVE FORCES. Today the Integra Lifesciences Kit has 100% of the market, which includes a free-hand, hand-cranked drill, without any features for guidance or stability. The second bedside competitor, Phasor Drill, is a battery-powered drill with FDA clearance but has yet to penetrate the market. It also includes no features for safety or guidance. The lack of plunge protection means that battery power makes it more difficult for the surgeon to prevent drilling past the skull and into the brain. There are three main competitors in the operating room intracranial access market: the Medtronic Midas Rex MR7 Pneumatic Surgical Drill, Micromar EasyDrill Autostop Cranial Perforator, and the Stryker pi-drive CORE drill. Such products include features such as electric power and plunge protection but lack control and guidance, yielding egregiously high failure rates for the operating room.

Advantages or differentiators

The patent-pending Hubly Drilling System is new and innovative because it includes safety, guidance, and ease of use features for use both inside and outside of the operating room. Our device includes (1) entirely mechanical, pressure-based plunge prevention; (2) battery power — rather than wired, electric power as is used in the operating room; (3) hardware catheter guidance utilizing the Ghajar guide technique; and (4) hardware drilling guidance. Our drilling system also includes features for ease of use.

Finance

We have not yet entered the market with our drilling system, but plan to do so in February 2022 after gaining FDA clearance. Today’s bedside, hand-cranked drill kits sell for $1200/single- use disposable kit. Hubly Drill will be sold at $2,000/single-use disposable kit with a 75% margin. With our safety features reducing patient complications, limiting operating room time, and reducing readmits, we conservatively estimate our device could save hospitals $10,000 per procedure. Based on our current hospital pipeline, which includes Stanford Hospital, Northwestern Hospital, and University of Texas Health System, we expect to sell 2,500 units in the first year of launch in 2022. That’s $5M revenue or $3.75M profit. Selling a projected 65,000 units, 25% of the U.S. and E.U. markets, we will make $135M revenue or $100M net profit.

The estimated market size for intracranial access alone is $400M in North America and $2B globally — that's the maximum potential revenue we could get, with $2000/kit pricing. Our secondary market is in orthopedics, where the Hubly Drill can be useful for all orthopedic procedures for which over-drilling into nerves is a risk. This presents $8.4B of potential revenue in North America alone. In total, Hubly has a global market of $70B - which is ever growing as skull puncture becomes a safer procedure and as we expand our product line to address more neurosurgical and orthopedic indications.

Business model

DISTRIBUTION.​ ​Key opinion leaders in both neurosurgery and general surgery, including the Vice Chairs of Neurosurgery at Northwestern Hospital, are excited and ready to use our product once we achieve regulatory clearance via our Class II 510k pathway. We have also had preliminary conversations with those at Medtronic, Integra, and J&J. When we launch we will begin with Northwestern Hospital and Stanford Hospitals. These are two of the top 5 American institutions for neurosurgery, yield some of the highest numbers of neurosurgical procedures performed per year, and they each have a member of Hubly’s leadership team working as a neurosurgeon. We will penetrate the Bay Area and Chicago, and then, we will expand distribution to the Midwest and California.

PROMOTION.​ KOLs in the U.S. have a massive impact abroad which is how we will grow our relationships and our sales. Journal publications outlining our cadaver and animal studies and post-clearance trials (utmost importance), circulated through our neurosurgeon and hospital networks, will serve as crucial promotional for us. Promotional material will be handled by the Marketing and Communication Strategies team. Hubly will focus on developing public relations between the company and the media, not only creating favorable publicity but also providing security in the face of negative situations. We also consistently send marketing updates through loyal email lists and regularly post branded messaging on our website as well as social media platforms Facebook, LinkedIn, Twitter, and Instagram. We will also create training videos that we will post on our social media. Such training videos will feature top KOLs in the industry as a promotion. Our product launch will be made online and with large advertisements at trade shows. Large hospitals and private practices should be marketed to differently, yet surgeon interaction is key in both.

Money will be spent on

Key hires: VP Engineering (Tyler Panian), VP Quality (Julie Byars), Systems Engineering Lead (Steve Maltas),
FDA tests: Bovine scapula benchtop, live sheep, endotoxin

Offer for investor

SAFE note: $6,000,000 pre-money valuation cap, 15% discount.

Team or Management

Risks

Strengths:
Hubly Drill has strong distinguishing characteristics, such as brain plunge prevention, catheter alignment, battery power, and precise guided drilling
Solid surgeon and hospital pipeline relationships.
Strong sponsorships and financial support, including from top-ranked accelerators and government agencies.

Weaknesses:
Hubly Drill must be priced cost-competitively, as it needs to overcome hospitals’ brand loyalty to established companies.
While the small size of the staff fosters camaraderie, it may also cause growth to be slower than if there were more personnel.
Bundling products is very common in the medical device space. Hubly is currently a one-product company.

Opportunities:
Fast growing market with high growth potential for intracranial access devices
Market leaders are slow to innovate, so they look for innovators, agile startups, such as Hubly for new technology from our ever-expanding product pipeline and to collaborate with or acquire.
Intracranial access technology market is expanding internationally in addition to domestically.

Threats:
Novel technology in the field of neurosurgery could create the possibility of new competitors.
Neurosurgical industry is slow to change or adapt to new technologies.

Incubation/Acceleration programs accomplishment

The Garage at Northwestern
Startup Boost Chicago
VentureWell E-Teams
Alchemist Accelerator
ZeroTo510
Start-Up Chile
National Science Foundation I-Corps
Mass Challenge Boston
NextFab RAPID
All Raise
Halcyon Incubator
Johns Hopkins University FFU Spark

Won the competition and other awards

SolidWorks for Entrepreneurs Grant
3rd Place at PitchTX SXSW
1st Place Lightning Round at New Venture Championship
1st Place at Startup Boost Demo Day
VentureCat Semifinalist
Creative Learning Fund Creator
2nd Place Silicon Valley Entrepreneurs Demo Day
Start-Up Chile 2nd Place Best Pitch
Start-Up Chile 1st Place Most Investable Startup
Top 50 Startup of the Year
StartX Semifinalist
Rice Business Plan Competition Semifinalist


Invention/Patent

HUBLY OWNS ALL IP with NO LICENSES No entity is entitled to royalties or licensure.

PATENT #1 Non-Provisional with PCT; has been pushed to the U.S. national stage. A search report from the USPTO has been received with favorable findings.
A DRILLING SYSTEM INCLUDES:
• a guide-hub that includes contact feet configured to be placed against a drilling surface to maintain a fixed angle with the drilling surface
• a drilling insert
• drill bit and a harness

PATENT #2 Non-Provisional with PCT
SUMMARY: Five methods of automated drill-bit retraction and plunge
prevention for surgical drilling.

PATENT #3 Provisional in Progress
SUMMARY: Additional methods of automated drill-bit retraction and plunge prevention for surgical drilling.

Product Video

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Idea
Current Status
Market
Problem or Opportunity
Solution (product or service)
Competitors
Advantages or differentiators
Finance
Invested in previous rounds, $
Business model
Money will be spent on
Offer for investor
Team or Management
Mentors & Advisors
Lead investor
Risks
Incubation/Acceleration programs accomplishment
Won the competition and other awards
Invention/Patent
Photos
Product Video