The Best of Years, the Worst of
As 2002 comes to a close, the neurotechnology industry can
look back on another paradoxical yeara year filled with exceptional
triumphs in technology developments and depressing financial and
economic news from the commercial enterprises in the field. This
issues Financial News [p3] offers an example: staff reductions
at Aspect Medical and Axon, flat sales at Bio-logic Systems, and
the demise of Symphonix.
Of course manufacturers of cochlear implants may see the latter
development as good news, since Symphonix middle-ear implant
may have been competitive with cochlear implants had that product
survived. But to the extent that Symphonix failure impacts
the perception of medical device start-ups in the minds of venture
capital firms, reimbursement organizations, and the media, this
is not good news for neurotechnology firms in general.
Other recent examples of bad news in the industry are microHelix
decreased revenues and 4-D Neuroimagings failed merger with
Neuromag [NBR Nov02]. And the functional electrical stimulation
field is still reeling from NeuroControl Corp.s decision to
discontinue marketing its FreeHand hand-grasp stimulator [NBR May02].
But 2002 was not without bits and pieces of good economic news.
Several start-up neurotechnology device firms received first- or
second-round infusions of venture capital at a time when other technology
industries are hard-pressed to get attention from VCs. The most
noteworthy examples: Vertis Neuroscience received $37 million in
funding [NBR May02], Optobionics Corp. received $20 million [NBR
May02], Sleep Solutions, Inc. received $7 million [NBR Apr02], and
Cyberkinetics Inc. received $5 million [p3].
Several public companies also showed improving financial resultssome
with record performanceincluding Advanced Neuromodulation
Systems, Cyberonics, Cochlear Corp., and Integra NeuroSciences.
Neurotech merger and acquisition activity during the year included
Compumedics purchase of Neuroscan Labs [NBR May02], Bionic
Technologies merger with Cyberkinetics [NBR Nov02], and Encore
Medical Corp.s purchase of Chattanooga Group [NBR Jan02].
Significant FDA product approvals reported during the year were
Vertis Neurosciences percutaneous stimulation system [NBR
Feb02], Medtronics Activa deep-brain stimulation therapy for
Parkinsons [NBR Feb02], and ANS Genesis implanted pulse
generator [NBR Feb02]. Some good news also came on the reimbursement
front, including favorable Medicare decisions or recommendations
on magnetoencephalography [NBR Aug02], functional electrical stimulation
[NBR Jun02], and implanted stimulators [NBR Nov02].
Still, the overall financial picture for the neurotechnology industry
in 2002 was not as favorable as was the technology development outlook.
Significant progress was made in a number of early-stage and more
mature product categories, including microstimulation systems, electrode
development, cortical control systems, visual prostheses, and stroke
rehabilitation devices. We can only hope that the latency period
from outstanding technological demonstration to commercial success
will be shortened in the year to come.
Editor and Publisher