Although venture capital investment in the neurotechnology industry was somewhat slow to develop in the early years of this industry, more recently, we have seen a number of VC firms take an active interest—and financial stake—in promising neurotech startups.
Frequently, this investment has benefited ventures targeting relatively large markets, such as stroke, or obesity. This month, we are very pleased to see investment in a neurotech market opportunity that, when measured in terms of the number of potential users, might seem small.
As we report on page 1 of this issue, the market for diaphragm pacing systems consists largely of individuals with the most severe spinal cord injuries and with ALS. Neither one of these user segments is large by comparison to stroke, chronic pain, or other patient populations served by neurotech devices. But in terms of what these devices have to offer recipients, the market opportunity is enormous. For individuals with high tetraplegia, emancipation from a mechanical ventilation system is an enormous benefit in quality of life terms, a point that was demonstrated well by the late actor Christopher Reeve, who was one of Synapse Biomedical’s first users in 2003. Reeve became an enthusiastic supporter of functional electrical stimulation in the latter years of his life in large part because of his positive experience with the Synapse device.
For individuals with ALS and other debilitating neurological disorders, a diaphragm pacing system is more than just a quality of life improvement. Here, it becomes a length of life issue, owing to the fact that the vast majority of deaths from ALS are attributable to respiratory failure. Breathing pacemakers such as Avery Biomedical’s device have already proven successful in obtaining Medicare and private insurance reimbursement, at a time when some neurotech device makers have had a difficult time getting favorable decisions from insurers.
The delivery of a well funded and reimbursed neural prosthesis market segment to these most disabled patient communities offers hope for other neurotech vendors developing devices for severely paralyzed and locked-in individuals. Cyberkinetics’ BrainGate brain-computer interface and Neural Signals’ speech prosthesis currently under development are two more examples of implanted stimulation devices that stand to serve a market small in number but huge in terms of payoff.
Investors and shareholders in these types of ventures are not only delivering a much-needed boost to a deserving user community. The potential for significant financial success is there despite the relatively small number of users. As Cyberkinetics CEO Tim Surgenor has pointed out, neurotech manufacturers can be enormously successful in a niche market by maintaining healthy margins and developing long-term presence. We congratulate the VC firms who have come to recognize this.
Editor and Publisher