Guarding Our Optimism
A sense of guarded optimism permeated the 13th annual Neurotech Leaders Forum, held in San Francisco earlier this month [see conference report, p7].In a session called “Neurotech Deal Scoreboard,” executives from Medtronic and Spinal Modulation, along with an industry consultant and financial professional, sounded a positive note on recent investment and partnership activity in the neurotech space. Conference participants also believe there is good reason to expect new entrants to the industry in coming months, possibly including device giants Johnson & Johnson, Covidien, Stryker, or Abbott.
Indeed there is good reason for optimism in the neurotechnology industry. The recent announcement by the Defense Advanced Research Projects Agency that it will spend more than $70 million to enhance deep brain stimulation technology is one piece of good news. DARPA’s program, called Systems-Based Neurotechnology and Understanding for the Treatment of Neuropsychological Illnesses, is part of the Obama administration’s BRAIN initiative. Most encouraging in this effort is the fact that the government sees advanced neuromodulation technology not just as a potentially valuable form of therapy for psychiatric disorders, but also as a powerful new tool to advance our understanding of how brain activity modulates mood and cognitive function.
Renewed interest in neurotech devices from pharmaceutical companies represents another cause for optimism. Within the last year, both GlaxoSmithKline and Merck have invested tens of millions of dollars in neuromodulation firms.
That said, there is ample reason to keep our guard up against potential threats to industry growth. At the Neurotech Leaders Forum, several participants pointed to the recent CMS noncoverage decision for TENS devices as a possible harbinger of bad things to come. Chris Castel of Accelerated Care Plus pointed out that inasmuch as surface stimulation is used by many pain doctors as a test to determine a patient’s suitability for an implanted spinal cord stimulation system, the TENS decision could represent a first step toward eliminating reimbursement for SCS in the future.
Also at the conference, Robert Schmidt from Cleveland Medical Devices sounded the alarm that forthcoming changes to patent laws in the U.S. could further tip the scales in favor of large corporations and against small startup firms. And several entrepreneurs grumbled that investment capital from VC firms is still hard to get.
While it is wise for everyone in the industry to recognize the potential impediments to growth, we still believe the recent outbreak of optimism is justified. We hope this outlook will be confirmed at next year’s Neurotech Leaders Forum.
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