Justin Zenanko is a Certified Public Accountant who led fundraising efforts at Recombinetics. Greg Molnar is the former Director of Neuromodulation Research at Medtronic. In 2018, they joined forces to found SynerFuse, a clinical-stage startup developing an innovative therapy to relieve chronic back pain. 

Co-Founders Justin Zenanko and Greg Molnar are out to blaze a trail, one they believe will have an enormous impact on the lives of people living with chronic lower back pain.

Their company, SynerFuse, is in the clinical stage of developing an integrated therapy to address both the mechanical and neuropathic causes of back pain at the same time. Typically, patients who experience residual pain following a conventional spinal fusion can wait up to 10 years before receiving neuromodulation therapy — battling additional surgeries and risky opioid medications along the way.

By creating a dorsal root ganglion (DRG) stimulator that doctors can implant at the time of spinal fusion surgery, Justin and Greg hope to short-circuit this long and painful cycle, provide faster relief to patients, and address chronic back pain without the extended use of opioid drugs. The first patient in the proof-of-concept study received a SynerFuse device in early 2022, and the team is well on their way to the fifth implantation.

As with any innovative therapy, SynerFuse faces a number of regulatory and clinical hurdles; Justin and Greg have encountered plenty of naysayers as they seek to challenge the status quo. But they remain invested, literally — most of the millions of dollars that SynerFuse has raised to date came from the founders’ own pockets, as well as friends and family, a few angel investors, and one foundation.

In this episode of Medsider, Justin and Greg share how they balance innovation with action and what keeps them going in the face of regulatory obstacles. 

SynerFuse’s co-founders are no strangers to the medtech world. Trained as a CPA, Justin spent seven years leading fundraising and corporate development efforts at gene-editing technology developer Recombinetics. Greg is the former Director of Neuromodulation Research for Medtronic, where he spent nearly a decade before moving to the University of Minnesota.

Their combined experience in startups and medical device innovation helped them avoid what Justin says is a common mistake in the industry.

“You can develop too much,” he says, explaining that it’s easy to get stuck in the innovation stage and miss out on the work that will actually get your product to market.

Greg says, “I’ve seen it in big industry, and in academia especially, where people want to put everything and the kitchen sink into their first device. The thing is, you don’t know what you don’t know.”

It’s only by getting a product into the market that startups can begin to learn from customers, stakeholders, and real-world applications. Then they can integrate those lessons into subsequent generations of the product.

“So you really have to think about your generations of product and getting the input along the way,” Greg says. “Or you could just burn up quickly trying to pack too much into your first offering.”

This wisdom extends to building a great team for your startup, too.

“It's a safe exercise, depending on your team, to just keep inventing, keep growing,” Greg says. ”And then you never have to deal with reality, because you're never gonna get out of the early concept phase. So you also need people that know how to take it from concept to commercial on your team.”

One of the moves that pushed SynerFuse into the action stage was forging a strategic partnership with Cirtec Medical Corporation, announced in early 2021. Not only is Cirtec an established medical device manufacturer, they are also the developers of a neuromodulation platform that SynerFuse used to bring their initial solution to market.

“What the gen one device contract and partnership with Cirtec did was to set the groundwork to put everything else in motion,” Justin says.     

Navigating the regulatory process, especially with an innovative product, is as much art as it is science, says Greg. Beyond the required paperwork, there’s also room for strategy and intuition.

“You need partners that not only know that you’ve got to fill out these forms, but also understand the strategic thinking in this, [what is a] largely process flow — those that can propose great arguments to the reviewers and write up the documents in a convincing way, “ he says.

He recommends shopping around, talking to colleagues and collecting testimonials when looking for these partners. Founders should continue checking in to ensure the partners they found are the right fit — and not be afraid to go a different direction if the partnership is not working.

Justin says innovators should expect to encounter negativity and pressure to conform to the usual ways of doing things. Founders should listen to their instincts and never give up, even when it means questioning the status quo.

“A lot of times I think the bigger company mentality is, Well, you can’t be wrong, you have to have it all figured out,” Justin says. “But if you’re committed to your team, and you’re committed to your vision and your passion, and you have faith to persevere, it’s amazing how you will find ways to overcome.”     

Justin and Greg bring a similar level of confidence to the question of reimbursement — how will doctors and hospitals get paid for a brand-new therapy that doesn’t even have a medical code?

“It’s not a hurdle that can’t be overcome,” Justin says, adding that if SynerFuse’s therapy can keep patients out of the pain-surgery-opioid continuum, it could save the industry $20 billion per year.

The reimbursement conversation — which for SynerFuse includes a big-picture look at the economics of their technology — is one that has to take place up front. Ultimately, it’s the payments that make the world go round, says Greg.

Opioid treatment for chronic back pain can run up to $80,000 per year and can continue for several years, he says. Compare that to the $25,000 cost of a device like the one SynerFuse is developing, and the math is pretty obvious.

The co-founders have also had conversations about how much patients would be willing to pay out-of-pocket for access to effective pain relief. And they’ve discussed alternative reimbursement approaches — including large, self-insured employers that might see the benefit of paying to treat injured workers.

Planning for all of the possibilities aside, Greg and Justin seem certain that the process will work out in their favor.

“As long as you have a therapy that works and helps patients, and the data is good, and it’s effective and safe, it will get paid for,” Greg says.     

SynerFuse’s strategic advisors and board of directors include doctors, regulatory officers, and former leaders of large insurance companies — partners that will help their innovative therapy find a home in the medical ecosystem.

What you won’t find there are any VC (venture capital) investors. Justin and Greg have raised SynerFuse’s funding from friends, family, and angel investors — and from their own pockets. They have led every fundraising round so far.

“It changes everything,” Justin says. “When you’re having a conversation — regardless of the concept or the vision — the final due diligence is, Well, what are you in for? If you’re not in for it, then you’re telling me to my core, to my gut level, that you don’t believe in it.”

He says taking venture capital funding can put companies in a difficult situation, especially if the management team and VC investor(s) disagree on the vision or timeline. SynerFuse understands the importance of finding angel investors who are aligned with the startup’s trajectory.

“All of our angels have made a bet on myself and Greg, that we are the two to make the thing happen and to get to the promised land,” Justin says, adding that he and Greg and their families are also heavily invested for the long term.

“We can’t walk away. If things don’t go right, I can’t just leave,” he says. “I have no choice but to push through, and for us to push through together.”