Neurotech Leaders Forum Panelists and Attendees Discuss Future of Industry

About 65 executives, venture capital professionals, and researchers participated in the 2003 Neurotech Leaders Forum in San Francisco on September 9, 2003. The full-day event, presented by Neurotech Reports with platinum sponsorship by Quallion LLC, featured a keynote address by Jennifer French, the executive director of the Society to Increase Mobility (STIM) and a pioneering user of an implanted standing/transfer system. French related her experiences with the device and reminded developers of FES systems that benefits to users go well beyond the systems’ nominal goals of restoring function.

Keynote speaker Jennifer French from the Society To Increase Mobility used her implanted standing prosthesis to deliver her talk.

In a morning session devoted to “Neurotechnology Capital Markets,” representatives from four venture capital firms discussed the outlook for funding device startups in the neuro space. The panelists, including Heath Lukatch from Piper Jaffray Ventures, noted that valuations for early-stage firms have diminished in recent years, in part because many VCs currently prefer late-stage companies and in part because of the current difficulty in locating angel investors. The depressed IPO market has also hurt valuations, leaving acquisitions the only viable exit strategy for many funded firms.

Neurotech Business Report editor James Cavuoto moderates panel on venture capital investment.

Roger Quy, from Technology Partners, reminded entrepreneurs that VC firms look for returns exceeding a multiple of 10 times their investment in order to compensate for investments that don’t pan out. He conceded, however, that the track record for device firms, compared to bio/pharma firms, would probably justify an expectation of lower multiples.

In an afternoon session devoted to neurotechnology spinoffs, participants discussed factors that come into play with industry/university collaboration, technology licensing agreements, and consulting with faculty members. Most of the neurotechnology entrepreneurs at the conference reported positive experiences in their relationships with universities.

The CEOs of six neurotechnology start-up firms made presentations during the forum’s entrepreneur panel. Tim Surgenor from Cyberkinetics, Inc. described his firm’s brain computer interface and its market potential in neural prostheses. Steve Michelson from Cyclotec AMT demonstrated the company’s wireless TENS devices that attach to the body like adhesive bandages. Scott Corbett from Advanced Cochlear Systems described his firm’s work in cochlear implant technology and optical transcutaneous data transfer. And Jason Harry from Afferent Corp. described how his firm’s sensory stimulation technology will serve the stroke, diabetes, aging, and sports injury markets.

In a closing session, attendees offered their views on developments likely to take place by 2010. Several attendees expected significant progress on visual prostheses.

Entrepreneur Panel Presentations:
Scott Corbett, Advanced Cochlear Systems
Jason Harry, Afferent Corp.
Steve Michelson, Cyclotec AMT
Lee Cuthbert, Intelli-Scents
Alan Olsen, Robomedica Inc.

Other Presentations:
Chris Berka, Advanced Brain Monitoring Inc.
Gerald Loeb, University of Southern California
Phil Kennedy, Neural Signals
Roger Quy, Technology Partners