Advances in Neurotechnology Bring Device Community Huge Profit Potential While Helping to Improve Patients’ Quality of Life
Jennifer Whitney, Editor
Few things in life are as heartbreaking as watching a loved one deteriorate from a vibrant, active person into a shell of his or her former self. Anyone who has witnessed a person left incapacitated after a stroke or traumatic spinal cord injury, or ravaged by the deteriorating effects of diseases such as Alzheimer’s or even severe depression, knows all too well the devastation a neurological condition can cause.
As neuromodulation grows more sophisticated, devices such as Cyberkinetics’ Andara OFS System for treatment of acute spinal cord injury are poised to offer dramatic quality-of-life changes for patients. (Note: This device is not approved for use, but Cyberkinetics has applied for a humanitarian device exemption from the FDA.) Photo courtesy of Cyberkinetics.
As Medical Product Outsourcing has demonstrated during the past year through its “Advances in Technology” series, so many medical device market segments have introduced (or are working on) a wide variety of equipment and products that are going to help aging populations live longer and with a quality of life unparalleled to that seen in the past. Some of the greatest innovation, however, is starting to emerge from one of the fastest-growing sectors in the industry: neuroscience.
“Neurotechnology is the new frontier, especially now that cardiology markets are maturing,” noted Jason Wittes, managing director, medical devices, cardiology and orthopedics, for Leerink Swann, a full-service investment banking service in Boston, MA. “Neurotechnology is definitely changing the way medicine is practiced. It’s allowing device treatments into markets, where the best and only option used to be drugs. Specific markets include pain management, stroke movement recovery, weight loss and depression—areas that were poorly served by drugs.”
According to recent research from NeuroInsights’ The Neurotechnology Industry 2007 Report, neurodevice revenues in 2006 were $4.5 billion (and diagnostics were $15 billion). Venture capitalists invested $1.67 billion in the overall market in 2006, a 7.5% increase from the prior year. At least 500 companies worldwide currently are operating in the neurotechnology industry.
Indeed, neuroscience is such a hot market right now that even the Cleveland Clinic jumped on the bandwagon last year when its annual Medical Innovation Summit was devoted to neurological advances in medicine. “There’s a great deal of excitement about neurosciences,” Christopher Coburn, executive director of CCF Innovations, the Clinic’s commercialization group, said last year. “It’s viewed by many to be an area of exceptional opportunity, both in terms of new therapies but also in terms of investment.”
Furthermore, on Sept. 25, Nasdaq launched a new index of companies whose primary focus involves neurological and psychiatric medicine. As one of the first indexes focusing on a specific disease category, the Nasdaq NeuroInsights Neurotech Index (created in conjunction with NeuroInsights) includes 32 companies from the drug, device and diagnostic sectors, which have combined market value of $71 billion.
“It’s truly a benchmark for the industry and a metric of the progress being made,” said Zack Lynch, executive director of the Neurotechnology Industry Organization in San Francisco, CA. “I think that’s very exciting given that brain-related illnesses represent the largest unmet medical market opportunity."
In the neurodevice sector, three major markets have emerged, according to Lynch. The largest is the $2.5 billion neurosurgical market, consisting of tools used for procedures such as tumor removals or neurovascular interventions (such as to treat stroke victims) using coils, balloons, stents and other products. Neuromodulation, which encompasses stimulation devices used to restore function, is a $1.38 billion market. The final category is neuroprosthetics, a $540 million market consisting of products such as cochlear implants for hearing-impaired individuals, implants for spinal injuries and retinal implants (still in development). In addition to these markets, another emerging area is neurosoftware. Although it’s currently a small segment ($75 million in 2006), several companies are working on software for use leveraging neuroplasticity and neurofeedback, among others, said Lynch.
“One thing that’s interesting in the neurodevice market is there’s no one company that participates in all four segments. There’s no gorilla in the marketplace,” Lynch said. As a result of all the potential innovation in this somewhat untapped market, Lynch believes the industry will see “a flowering” of many startups in the neurodevice sector.
While it would be virtually impossible to catalog every advance occurring in neurology today, following are a look at some of the most promising technologies available or currently in development today.
Neuromodulation Expands Into New Applications
Of all the categories in the neurodevice market, Lynch believes deep brain stimulation (DBS), already available from large device companies such as Medtronic and St. Jude Medical, will be the “hot market” in years to come. In fact, neurostimulation, which relies on devices that are similar in design to pacemakers and implantable cardiovascular defibrillators, will keep growing and gain wider use for a variety of applications. “We’re just at the edge of a massive explosion in the specificity of these devices. The technology is making it more possible for us to create devices that can target areas of the brain with ever more precise specificity. The hard work is behind us,” Lynch said.
Already FDA-approved for treatment of tremors caused by Parkinson’s disease, DBS is nearing approval for treatment of obsessive-compulsive disorder and is in clinical trials as a therapy for depression. Some studies have shown DBS also may help control symptoms of Alzheimer's disease, paralytic muscle rigidity, epilepsy, Tourette syndrome, some addictions and various other conditions.
One patient population of great interest to medical device inventors today is stroke victims, and for good reason. The annual cost for treatment, post-stroke care, rehabilitation and lost income to victims is $30 billion, according to the American Heart Association. Many of the more than three million survivors are left with decreased functioning, and their needs have been largely unmet to date—but they have reason for hope of better quality of life, thanks to various emerging companies working on devices that, if proven safe and effective, will change a stroke survivor’s fate.
Take Northstar Neuroscience’s Renova device, for example. This implantable technology, which is still in the investigative stage, differs from what’s already on the market because it uses a less-invasive approach than DBS devices, stimulating the cerebral cortex (the outer layer) of the brain. In the company’s ADAM and BAKER clinical trials, preliminary results have shown an average of 20%-30% improvement in function.
“Most therapies for stroke are focused on intervening when the blood is cut off from the neurons. For us, we’re really trying to develop a therapy for the people who have had to live with a disability with no solution. Even if it doesn't fully restore function, earlier trials indicate that in some individuals it can increase quality of life--the ability to dress themselves, take kids to school, [etc.]... For stroke, nothing has ever been shown to improve function in a large clinical trial in a group of patients years out from their stroke--we would be the first [company to do so],” Northstar Neuroscience CEO John Bowers said, adding that if all goes well, the company will file for pre-market approval early in the second quarter of 2008.
While the Seattle, WA-based company is heavily focused on gaining approval for a stroke indication, Northstar also is investigating use for treatment-resistant depression by stimulating neural firing at the brain’s cortex level. Although approval would be several years down the line, Bowers said preliminary results from its Prospect feasibility trial are significant for this patient population.
“These people were an extremely severe patient population—they had failed an average of nine therapies prior,” he said. The implications of the early success with this treatment suggests that a large patient subset could benefit down the line, since one third of the estimated 15 million patients with major depressive disorder fail four or more therapies.
Along with stroke and depression, the company is exploring use in treating tinnitus (ringing in the ear) and aphasia (speech impairment).
Neurostimulation products aren’t just being developed for use in the brain itself. For instance, Cyberkinetics Neurotechnology Systems, Inc. in Foxborough, MA has developed its Andara OFS System to stimulate the growth of new nerve fibers by applying a low-voltage, direct electrical current to create an oscillating electrical field around the injured area of the spinal cord. The company has applied for a humanitarian device exemption from the FDA for the device as a treatment for acute spinal cord injury.
People with spinal cord injuries lose motor function, sensory function and autonomic function—which controls heart and respiration rates, as well as digestion and other important bodily functions. “In clinical trials, people with spinal cord injuries who were treated with the Andara OFS System have reported particularly strong results in sensory recovery and pain relief. It’s not a cure, but it’s a good first step to bring some relieve and improved quality of life to people with spinal cord injuries,” said Timothy Surgenor, president and CEO of Cyberkinetics. “This therapy has an excellent safety record and we think it’s an exciting opportunity—for us and for people with spinal cord injuries.” Compared to results from a control group in one study, results from patients implanted with Andara OFS System showed 50%-75% improvement, he noted.
Cyberonics, a Houston, TX-based pure-play neuromodulation company in operation for more than 20 years, is well known in the medical device industry for its Vagus Nerve Stimulation (VNS) Therapy. Indicated for treatment of both pharmacoresistant epilepsy and treatment-resistant depression (TRD), VNS Therapy consists of a pacemaker-like device implanted in the chest that delivers mild pulsed signals to the brain via the vagus nerve in the neck.
“Although the VNS Therapy implant procedure does not involve the brain, stimulation to the left vagus nerve has been shown to affect very specific areas of the brain important for the regulation of mood and seizure activity,” explained Daniel Moore, Cyberonics’ president and CEO. Although pharmacologic approaches usually are the first choice in patients with conditions such as epilepsy or depression, those whose needs are not fully met with drugs can undergo a minimally invasive procedure to receive VNS Therapy. Since the device’s approval in 1997, more than 42,000 individuals have received VNS Therapy for epilepsy, and at least another 3,000 have received it for treatment-resistant depression since that indication was approved in 2005. As a result of VNS Therapy success to date, preliminary studies also have been conducted to begin evaluating the therapeutic utility of VNS Therapy for other conditions such as bulimia, obesity, Alzheimer’s disease and anxiety disorders.
Examination of the Neurosurgical Market
Cyberonics’ VNS Therapy, shown above, is a unique treatment because its pulsed signals are delivered to the brain via the vagus nerve. Photo courtesy of Cyberonics.
There are two types of stroke: ischemic (the most common) and hemorrhagic (the most deadly). One company, Micrus Endovascular in San Jose, CA, is devoted to making sure patients who have hemorrhagic strokes due to a burst aneurysm don’t have to endure the traditionally invasive surgical approach, such as a craniotomy. Just as we’ve seen in the cardiovascular realm, when dealing with an aneurysm today, the typical arsenal of products used during a hemorrhagic stroke procedure includes guidewires, microcatheters, coils, stents and balloons. Micrus Endovascular launched its ACT MicroCoil Delivery System in Europe in 2000 and in the United States in 2001 and has since rolled out a variety of the main products used in procedures that treat hemorrhagic stroke victims.
“We have grown our business from a handful of people to approximately 320 full-time employees, and in addition to our headquarters in San Jose, California, we now have offices in Switzerland, the United Kingdom and Miami. We’re rapidly building our product platform, enabling us to capture a larger share of the stroke market,” said CEO John Kilcoyne.
According to Kilcoyne, about 40% of aneurysms currently are treated endovascularly, with the remainder being performed through surgery. However, the market is shifting at a rate of about 15%-20% from the use of clipping toward the use of coiling, which is less invasive than the former approach. “Coiling is safe and effective, and it’s a good alternative to surgery,” Kilcoyne said, adding that public data have shown a 23% reduction in death and morbidity when coils are used to treat an aneurysm.
As of press time, the company was preparing to launch its Enzo device, the first “steerable” microcatheter, a product Kilcoyne described as “extremely novel as it allows physicians the ability to steer the tip of the microcatheter to facilitate easier access to and potentially more thorough treatment of the aneurysm.” For all of its product lines, he said, “We will continue to introduce new products that offer clinical advantages based on innovative technologies for the treatment of hemorrhagic and ischemic stroke.”
Brain Monitoring Systems Come Into Play
Not all brain disorders require any type of surgery to explore what’s going on inside the head. In fact, home monitoring products are expected to play a much larger role in patient care for individuals who have neurological disorders. Cleveland Medical Devices (CleveMed), for example, has been developing small, wireless telemetry technologies with new applications for sleep disorders, movement disorders and brain monitoring in the emergency room.
The goal is to make monitoring much more convenient for patients and clinicians alike. For example, patients with sleep disorders—of which there are approximately 18 million in the United States alone—traditionally have to travel to a clinic (sometimes waiting months to get a bed in the facility) and stay a couple of nights to be monitored and treated. CleveMed’s Division of Sleep Disorders has launched several FDA-approved wireless devices that can be used at home to monitor disorders such as sleep apnea.
Similar products have been developed by the Ohio-based company’s Division of Movement Disorders for monitoring patients affected by Parkinson’s disease and other disorders. Although patients currently record their symptoms and rate the effectiveness of drug therapies using a written diary, CleveMed is working to develop a home monitor that patients can wear to record and transmit data throughout the day to the patient’s care provider.
“It objectively records Parkinson’s disease and essential tremor symptoms and the doctor can then download the data to assess the efficacy of the drug being taken,” explained CleveMed’s President, Hani Kayyali. “This can ultimately save costs because it minimizes return trips to the doctor’s office,and it will improve their overall quality of life by providing continuous monitoring of symptom fluctuations to modulate treatment interventions.”
Wireless home-monitoring products are expected to make a splash in years to come as patients take charge of their own healthcare. Shown above is CleveMed’s Kinesia device for objectively quantifying movement disorder motor symptoms. Photo courtesy of CleveMed.
Cyberkinetics also is developing a neural interface system that potentially could restore functionality for severely impaired individuals. The BrainGate Neural Interface System, currently in pilot clinical testing, enables a person with quadriplegia to use his/her own brain signals, or thoughts about moving, to control a computer cursor to perform a wide range of self-directed activities, including communication and speech software, telephones, a television or lights, and even a wheelchair. A small, baby aspirin-sized implantable sensor is placed on the area of the motor cortex that controls arm and hand movement to pick up and transmit brain signals to a computer that translates the signals that move the computer cursor on the screen, just as a hand would do with a mouse. The goal of this development program would be to allow these individuals to one day use their own arms and hands again.
“Right now, we’re dealing with the tip of the iceberg in developing the BrainGate technology into products for paralyzed people—many of whom can’t speak or move, or both. At this stage, we’re demonstrating the proof-of-concept—that we can get develop this into products that offer paralyzed people greater independence and quality of life,” Surgenor said. Although the equipment hasn’t been widely tested and is still in the investigative stage, he noted that, “Although the market is quite small, the potential benefit to people is huge—it’s extremely exciting.”
Opportunity Grows—But So Do Challenges
Even as excitement abounds in the neurology sector, it is tempered by the usual suspects in medical device development and marketing. As with any new technology, tightening reimbursement will require innovators to justify the cost of these new products with adequate proof of safety and efficacy.
Cyberonics is no stranger to the challenges associated with gaining reimbursement for a product after it has been approved by the FDA. The company’s VNS Therapy, covered by the Centers for Medicare and Medicaid Services for use in epilepsy, faced marketing challenges after the agency denied coverage for use in treatment-resistant depression. Moore said the decision was disappointing, given that more than 15,000 prescriptions had been written for VNS Therapy for patients in whom traditional pharmacologic therapy and, in some cases, electroconvulsive therapy were not effective in treating their depression, and the prescribing psychiatrists had been waiting for reimbursement approval for these patients.
“It can be frustrating for patients and their physicians, if you look at the impact—before we received the non-coverage reimbursement decision, we had begun treating more than 500 patients a quarter, and in the last quarter we were down to approximately 150. That means there were 350 more patients a quarter who had access to the technology before and, today, do not. It’s not only a financial issue; you spend years developing a product and get a decision which affects many patients. Patients are still looking for some hope,” Moore said.
Still, lessons learned from advances in cardiovascular and other maturing markets have helped fuel the initial success of the neurotech industry in general. “You are noticing that low-maintenance schedules are justifying the cost of these products. As technology matures and batteries in the devices become longer and devices smaller, the cost of maintenance will be lower,” Lynch said.
And, as Surgenor noted, “These are some the most devastating diseases and conditions and the most expensive to treat. I think a device that shows even a small improvement would be well accepted—because there are no currently no alternatives.”
And so both OEM giants and emerging startups continue their work. But how will the market shape up from a business perspective? After all, if there’s one consistent trend in the medical device industry over the past year or two, it’s been one of consolidation, with mergers and acquisitions dominating the news.
“I think you’ll see a wax and a wane in activity,” Lynch said. “There’s so many market opportunities that you‘ll continue to see an explosion of neurodevice companies moving forward and the continuing acquisition of those companies.”
That opportunity doesn’t mean it will be easy for an emerging company to make a name for itself among the household names. “It’s more and more difficult for a small company to make a name for itself because of the competition, and big players have the resources to fund any type of innovation quickly. It’s hard to compete,” Kayyali acknowledged. “Once markets become mature and have high growth, the big companies cannot keep up with demand or pace of the market, so they consolidate.
“Our primary target is to develop new products that can truly help patients. Once we do that we will be successful, and profits will follow. Always care for the patient,” Kayyali concluded.
“Some other bigger companies are naturally more diversified. There’s an advantage to being smaller and focused just as there is to being a larger conglomerate,” Moore said. “The common denominator is performance. You need to stay focused on what differentiates you.”
Moore, who joined Cyberonics in May after working previously for Boston Scientific, said the main drive for his decision to take the helm at Cyberonics earlier this year was “the future of what’s possible” in the neurological realm.
“Today, we have a more educated patient consumer. We all have more participation in the payment for our procedures and the decisions about which therapy to choose. You have those forces coming together,” Moore said. “Overall, when you look at what we’re doing, we’re basically helping patients achieve a better quality of life.”
Sidebar: Wanted: Collaborations to Move Technology Forward
With the recognition that innovation usually doesn’t occur in a silo, two organizations are making it easier than ever for device developers and clinical practitioners to collaborate and create optimal products for neurotechnology markets.
Founded in 1998, the Center for Integration of Medicine and Innovative Technology (CIMIT), through its NeuroTechnology Program, is one such entity helping to facilitate convergence of these groups. Led by Steven Schachter, MD, a nationally renowned epilepsy expert and professor of neurology at Harvard Medical School, the CIMIT NeuroTechnology Program forms bridges between world-class technology partners (eg, MIT, Draper Laboratory and Boston University) and clinicians at Harvard teaching hospitals and Boston Medical Center.
“We not only look at collaborations but focus on significant unmet needs,” Schachter said. “My experience with CIMIT tells me that efforts are going to have the best chance of moving the field forward if they combine the expertise of the care providers on the front line of clinical care along with the appropriate technological engineering expertise. One without the other, in my experience, is not going to create the optimal solution.”
To that end, the Boston, MA-based CIMIT helps facilitate introductions between clinicians and engineers. Describing it as “sort of a social networking catalyst,” Schachter said CIMIT performs this task by assigning a liaison to members of institutions who have the expertise and capabilities needed. In addition, CIMIT helps advise investigators on commercializing their products. This includes introducing inventors to established companies looking for licensing opportunities as well as providing advice to companies hoping to gain visibility among the investment community.
“We’ve spun out a number of new companies or facilitated grants or licensing,” Schachter said. “The bottom line of CIMIT is to advance healthcare. We realize technology isn’t going to reach a patient if it isn’t financially viable. It’s in our best interest to help these inventors understand what needs to be done to help their product reach clinics eventually.”
Similarly, the Neurotechnology Industry Organization (NIO), headquartered in San Francisco, CA, is a non-profit trade association that represents neurotech companies, neuroscience research centers and brain disease advocacy groups. NIO has a three-pronged strategy: promote, advocate and support the neurotech industry.
For example, NIO is spearheading the National Neurotechnology Initiative, a new federal R&D program aimed at accelerating translational neurotech innovation and improving the timeliness of the FDA review process for neuroscience drugs, devices and diagnostics. Other areas of interest include issues pertaining to tax code, intellectual property, neuroethics, public policy, reimbursement and patient advocacy. In addition, NIO focuses on neurotech companies’ funding needs from both private and public sectors. Benefits of NIO membership include representation in Washington, DC, startup marketing support; inclusion in the neurotech industry business directory; participation in an annual public policy tour in Washington, DC; being featured in the public relations campaigns; and discounts on reports and conferences.
For more information on these entities, visit CIMIT’s Web site at www.cimit.org and NIO’s Web site at www.neurotechindustry.org.