Introduction

Nerve Trace automates quantification and reporting of intra/epidermal nerve fiber density (ENFD/INFD) from skin‑biopsy whole‑slide images to support diagnosis of small‑fiber neuropathy (SFN) and related neuropathies. We deliver AI overlays, rapid reviewer tools, defensible metrics, and Part‑11–style e‑signatures—integrated into existing lab workflows. Clinical counting rules and reporting align with EFNS/PNS guidance for SFN skin biopsy (only fibers crossing the dermal–epidermal junction, millimeter normalization).

Market Opportunity — Hybrid SaaS + Owned Lab

Two revenue stacks by design. We start as a SaaS platform for existing labs (platform fee + per‑slide usage) and deliberately scale into Nerve Trace‑owned labs performing ENFD/INFD analysis at $500 per case—roughly ½ of today’s $900–$1,500 market price (cash/insurance). Our automation (quantification, QC, provenance, report generation) creates materially better unit economics.

Burden & demand (U.S. + global context). Diabetes and its complications anchor the demand for neuropathy testing. In the U.S., diabetes imposes an annual economic burden of ~$413B (2022), with neuropathy among the costliest complications. Globally, diabetes‑related health expenditure surpassed ~$1.0T in 2024, ~12% of health spending. Within this macro pool, peripheral neuropathy (~20M affected in the U.S.) drives substantial diagnostic workups. SFN remains under‑diagnosed, and distal‑leg skin biopsy with ENFD/INFD is an endorsed, reimbursable component of appropriate SFN evaluations. Punch biopsy (CPT 11104/11105) and IHC (88342/88341) are established codes, and accelerating digital pathology (WSI) adoption provides the infrastructure we ride.

Test-spend read-across (illustrative). Estimated annual U.S. ENFD spend is simply the number of suspected-SFN workups that include skin punch biopsy with IHC multiplied by the paid price per ENFD/INFD test. For illustration: if 100k–200k workups include ENFD/INFD and payers reimburse $900–$1,500 per test, aggregate spend is roughly $90M–$300M. At a $500 Nerve Trace-owned-lab price, the same volume would total $50M–$100M, expanding access while preserving margin via automation.

• If, illustratively, 100k–200k SFN workups include ENFD/INFD at $900–$1,500 per test (payer mix), that implies $90M–$300M annual U.S. ENFD spend today.

• Under Nerve Trace‑owned labs at $500/test, the same volume would cost $50M–$100M, expanding access while preserving margin via automation.

Price–value wedge. We undercut incumbents while improving auditability (transparent counting rules, QC flags, run‑scoped provenance). That lets us win both partner‑lab SaaS (efficiency and clean claims) and owned‑lab analysis volume (lower price with strong margins).

(At‑a‑Glance) Partner‑Lab SaaS (now):

• Platform: illustrative $2.5k/month per lab.

• Usage: illustrative $25/slide; typical ENFD case uses ~3 slides.

• Example per lab/month: 75–110 cases → ~225–330 slides → $5.6k–$8.3k usage + $2.5k platform → $8.1k–$10.8k/lab/mo.

Nerve Trace‑Owned Lab (next):

• Price: $500 per analysis (≈½ of $900–$1,500 market).

• Illustrative COGS: ~$200/case (reagents, tech time, slide prep/scan) → ~60% gross margin.

• Sensitivity: every 1,000 cases/month ≈ $6.0M annual revenue / ~$3.6M annual gross profit.

Read‑across: Phase 1 is SaaS‑led (platform + usage through partner labs). Phase 2 adds owned‑lab volume at $500/case, preserving margin advantage via automation.

Product & Technology

• Core: AI‑assisted ENFD/INFD quantification with transparent counting rules; mm‑normalized counts; live QC (contrast, artifacts, boundary ambiguity); run‑scoped provenance (model version, pixel calibration, overlays).

• Clinical fit: Viewer for SVS/NDPI/OME‑TIFF; report templates with reference‑range comparison; Part‑11–style e‑signatures; immutable PDFs. CAP‑aligned WSI validation plan.

Business Model

• SaaS (per‑lab/per‑org) + usage‑based analysis credits (per slide). Add‑ons: auto‑PDF, secure share links, audit exports.

• Enterprise: site validation kit; LIS/HL7 (ORU) connectors post‑pilot.

• Owned‑Lab Expansion: stand‑up Nerve Trace sites to deliver $500/case analysis with automation‑enabled margins; same reporting/audit backbone.

Early Traction & Near‑Term Milestones

• Pilots: 3 U.S. dermpath/neuromuscular labs to validate accuracy, repeatability, and reviewer time savings vs. local gold standards. PRD includes run‑scoped reporting and a versioned "File Cabinet" for audits.

• Validation: Non‑inferiority vs. expert counts (Deming/Passing‑Bablok, Bland–Altman, ICC) and WSI concordance per CAP guideline.

Reimbursement & Policy (Why Labs Can Get Paid Today)

• Specimen acquisition: CPT 11104/11105 reimbursed (CMS PFS / Procedure Price Lookup).

• Pathology/IHC: 88342 (initial antibody) + 88341 (each additional) with MAC‑specific limits; policies define medical necessity and unit caps. Our transparent method versioning and QC trail support payer scrutiny.

• ENFD coverage: Multiple commercial payers publish coverage for ENFD measurement when criteria are met—evidence that labs can bill SFN workups using established codes now.

Why Now (Regulatory & Standards Tailwinds)

• Clinical consensus: EFNS/PNS endorse distal‑leg skin biopsy with agreed counting rules—standardizing what “good” looks like.

• Digital infrastructure: CAP’s WSI validation guidance underpins scaled adoption of digital viewers and automated quantification.

• Provenance by default: Auditors and payers expect traceability; our run‑scoped reports (model version, overlays, QC) are built for that.

Go‑To‑Market

• Phase 1 — SaaS‑led: pilot labs (configure reference ranges), white papers on repeatability and time savings, MAC‑by‑MAC policy mapping.

• Phase 2 — Regional roll‑out: dermpath groups & neuromuscular centers; LIS/HL7 connectors; payer evidence packets leveraging QC/audit exports.

• Phase 3 — Owned‑Lab ramp: activate Nerve Trace‑operated sites; drive $500/case volume; expand to autonomic fibers and CCM modules; international reference‑range localization.

Roadmap & Vertical Expansion

• Within SFN: distal‑leg → thigh/other sites; age/sex‑stratified reference ranges; immunofluorescence pipelines using published normative datasets.

• Beyond ENFD: sweat‑gland nerve fiber density, autonomic quantification, and CCM interoperability—widening small‑fiber assessment with the same audit/report backbone.

• Enterprise analytics: longitudinal response dashboards (e.g., post‑intervention ENFD deltas) for clinics and payers.

Investment Thesis (What a VC Underwrites)

• Durable demand: large, rising chronic pool (diabetes‑driven neuropathy) with high economic burden.

• Revenue now, not later: reimbursed biopsy/IHC workflows today + published ENFD coverage policies → near‑term monetization without novel CPT risk.

• Software leverage → margin: AI overlays, audit‑grade provenance, and report automation riding WSI tailwinds → scalable, high‑margin SaaS + owned‑lab expansion.

Appendix — Illustrative 3‑Year Snapshot (from working model)

• Year 1 (SaaS‑led): ~10 labs; platform + usage revenue.

• Year 2 (hybrid): ~35 labs + owned‑lab ~500 cases/mo.

• Year 3 (scale): ~80 labs + owned‑lab ~2,000 cases/mo.

• Pricing assumptions used in the working sheet: $2.5k/mo/lab, $25/slide, ~3 slides/case, $500/case owned‑lab with ~$200 COGS (~60% GM). All assumptions are editable in the shared model.

Media Contact

press@nervetrace.com