From November 2001 Issue
Neurotech
Leaders Meet to Discuss Challenges Facing New Industry
by David E. Griffith, senior editor
The leaders of an emerging industry face many challenges. Chief
among these is exactly what to call their industry, what to include
or exclude from their industry’s big tent, how to segment their
industry’s market, and how to elevate their industry’s
profile with the media and the investment community.
All of these issues and more were debated and discussed at last
month’s Neurotech Leaders Forum held at the Sheraton Gateway
Hotel in San Francisco. Organized by Neurotech Business Report and
underwritten by Mayfield Fund, the Forum attracted more than a dozen
industry leaders representing diagnostic, neural interface, and
neurostimulation companies, and featured a spirited exchange of
ideas and opinions.
Moderator James Cavuoto, editor and publisher of Neurotech Business
Report, opened the session with an overview of the industry and
analysis of its past, present, and future. One of the day’s
most pivotal discussions was over the very meaning of the word “neurotech”
as it applies to the industry. Cavuoto defined “neurotech”
as: “The application of electronics and engineering to the
nervous system,” a definition that was generally approved by
the audience.
Alan Gevins, Ph.D., president of SAM Technology, argued that there
were benefits to including neurotech under the umbrella of biotech.
“We are too small a segment to stand alone,” he said.
Wende Hutton, a partner at Mayfield Fund, explained the venture
capitalists’ position on the difference between biotech and
neurotech. “I think it’s very tough for investors and
my colleagues to get their arms around it when someone says they’re
a biotech company and they’re not making some sort of compound.”
Hutton’s comments led to an informal poll of the participants,
with an overwhelming majority saying that their companies were not
biotech companies but medical device manufacturers.
Ann Bunnenberg, Ph.D., president of Electrical Geodesics Inc., cautioned
that the characterization of neurotech as a class of medical devices
is problematic and warrants a definition that differentiates neurotech
devices from other medical devices. “A definition is helpful
so that investors will put us in a place that’s different than
the place for dental drills,” she said, adding that, “Neurotech
is a nice term because it recognizes that we look at the nervous
system.”
The forum participants concluded that neurotech was an accurate
and descriptive name for their industry. They next considered the
question of what product categories should be included under the
neurotechnology umbrella.
Neurotech Reports’ recent market study of the neurotechnology
industry describes five product categories: neural prostheses, neuromodulation,
therapeutic stimulation, neurodiagnostics, and neural-computer interfaces.
The key discussion during the market segments presentation centered
on Cavuoto’s decision to include neural stimulation devices
that restore lost bodily functions, including Medtronic stimulators
used to control incontinence under the category of “neural
prostheses.” Medtronic classifies its incontinence device as
a neurostimulation product.
Mayfield’s Hutton suggested that from the point of view of
the venture capital and investor community neurotech companies should
accept Medtronic’s taxonomic lead. Medtronic refers to its
implantable spinal and brain stimulators as neurostimulation devices.
“Medtronic is the industry leader, and they have [already]
categorized their products,” she explained. “If you can
follow the big kahuna leading the parade and they’ve categorized
things a certain way, I don’t think a small group of fledgling
companies should try to buck them.”
At the end of the day’s session, the market segments were addressed
in a free-flowing group discussion. The general consensus was that
five segments was too many, and the participants agreed that neurotech
should be organized as neurostimulation (including neural prostheses,
neuromodulation, and therapeutic stimulation), neurodiagnostics,
and neural-computer interfaces.
Following the discussion on product categories, the forum participants
addressed ways to make the neurotech industry more visible to the
media and the investment community. One suggestion was the formation
of a neurotech trade association. SAM Technology’s Gevins took
a negative view on that. “There just aren’t enough zeroes
yet. It’s balkanization There’s just not enough money
in it.” Gevins comments met with general approval. One major
dissenting voice was Electrical Geodesics’ Bunnenberg who argued
that an association is essential to growing an industry.
In addition, to the discussion of the challenges and issues facing
the industry, forum participants were given an opportunity to present
information about their prospective businesses and fields of study.
• Jerome Stone, R.N., program manager for the San Francisco-based
California Pacific Medical Center Research Institute, gave a presentation
on the clinician’s point of view regarding clinical trials
and pain studies.
• Benjamin Knapp, Ph.D., cofounder of BioControl Systems Inc.
in South San Francisco, explained his company’s research into
neural-computer interfaces for monitoring the causes of repetitive
stress syndrome injury.
• Edgar Eiland, vice president of Atlanta-based Neural Signals
Inc., discussed his company’s work on neural-computer interfaces
to help stroke and ALS patients communicate.
• Anath Natarajan, M.D., CEO of Baltimore-based Infinite Biomedical
Technologies, talked about his company’s work on clinician-driven
neural monitoring systems.
• Ann Bunnenberg, Ph.D., president of Eugene, OR-based Electrical
Geodesics Inc., detailed the technology behind her company’s
geodesic dome-shaped EEG monitoring system.
• Yitzhak Zilberman, director of Business Development for the
Alfred Mann Foundation, explained the mission and operations of
the Santa Clarita, CA-based research organization.
At the conclusion of the Forum, the participants overwhelmingly agreed that the day-long meeting was beneficial for the industry. They also were very receptive to a discussion of holding additional forums and conferences.