Second Chance for Stroke Market
The commercial outlook for treating stroke with neurotechnology devices improved at least slightly with the news that Northstar’s cortical stimulation technology had been acquired by St. Jude Neuromodulation [see article, p3]. Although Northstar’s EVEREST trial for motor recovery from stroke failed to meet its primary endpoint last year, we have reason to believe that the cortical stimulation technology will fare better in the hands of the Dallas-based St. Jude unit, formerly known as Advanced Neuromodulation Systems Inc.
In our view, the technology for enhancing cortical plasticity using targeted stimulation is and has been viable. It is the perception, particularly among investors, that took a beating with Northstar’s clinical and corporate failure. St. Jude, a public company, will not need to worry about placating wary venture capital firms. The company also has the financial resources—and the patience—to see the technology through new trials, device redesign, and the FDA approval process.
In all probability, the device that emerges from SJM Neuromodulation will be different than the one Northstar developed. Several observers familiar with the failed EVEREST trial noted that the problem was the failure to achieve motor threshold in the majority of trial participants. Those subjects who received a sufficient dose of stimulation performed significantly better than subjects who did not. There is a belief that part of the problem may have been a device design that failed to deliver sufficient power. It may also be true that a device delivering subdural stimulation would be more efficient than one using epidural stimulation, since there would be less energy dissipation.
Though SJM Neuromodulation seems eager to pursue the stroke treatment market, it will be interesting to see how the company prioritizes development of Northstar’s cortical stimulation technology for treating depression. As we reported last month, all of the participants in the clinical trial had to have the device explanted because of Northstar’s demise, despite the very promising results presented at AANS. Given the very promising research by SJM collaborators pursuing DBS for depression at Cg25, it’s not clear whether cortical stimulation for depression will be front burner or back burner.
The only negative in the SJM acquisition is the embarrassingly low price—$2 million—paid for the totality of Northstar technology and intellectual property. Given the magnitude of VC investment in Northstar over the years, this is not the kind of payout that gets investors excited. Still, the fact that PhotoThera recently closed a $50 million round for its stroke-treatment device despite mixed results from its NEST-2 trial indicates that the investment community has not given up on the neurotech market for stroke.
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