Neurotech Leaders Forum Participants Discuss Technical and Management Issues

Staff Report

About 70 neurotechnology executives and financial professionals met in San Francisco earlier this month for the fourth annual Neurotech Leaders Forum, organized by Neurotech Reports.

During a well received keynote address, Chris Chavez, president and CEO of Advanced Neuromodulation Systems, Inc., described many of the technical and management issues he confronted building the company into a successful and profitable firm during his tenure. He urged attendees to continue moving the industry forward and to combat government and regulatory hurdles posed by pending legislation regarding stock options and other issues.

Sam Hall from CitiGroup SmithBarney receives Gold Electrode Award from Neurotech Reports editor James Cavuoto.

On the first day of the conference, about 15 executives from neurotech startups and public firms participated in a short course on investment. Neurotech Business Report senior financial editor Glenn Cornett gave the group a tutorial on preparing a business plan and other documents needed before approaching a potential venture capital investor. Kevin Wasserstein from VC firm Versant Ventures offered feedback to the group on general and specific issues related to investment.

On October 5, a panel discussion on reimbursement and regulatory affairs featured representatives from the Alfred Mann Foundation, NDI Medical, and the Chubb Group of Insurance Companies, each of whom shared their experiences with different aspects of dealing with the government or insurers. Terri Zmina from NDI advised attendees to start thinking about reimbursement early in the product development process and to appeal every denial of coverage decision.

In the commercialization outlook session, Sam Hall, a financial analyst with CitiGroup SmithBarney, spoke of many of the challenges confronting commercialization of the neurotechnology industry. Gail Schechter from BioIntelligence gave a detailed discussion of grant opportunities for neurotechnology startups, with specific strategies for preparing the application. Andrew Merickel from the law firm Knobbe, Martens, Olson & Bear gave an overview of intellectual property issues confronting neurotech firms.

CEOs of several early-stage firms, including Advanced Brain Monitoring, Inc., Texcel Medical Systems, and Afferent Corp., made presentations on their company’s technology, as did executives from public firms Neurometrix, Enpath Medical, and Cyberkinetics.

Neurotech Business Report senior financial editor Warren Grill, from Duke University, presented an overview of several recent technical advances in the field. Jennifer French, the executive director of the Society to Increase Mobility, gave an update on the non-profit’s activities during a luncheon presentation.

Jennifer French from STIM gives the luncheon talk at 2004 Neurotech Leaders Forum.

In a wrap-up session that examined the perspective of venture capital firms on the neurotechnology industry, representatives from VC firms Vivo Ventures, Versant Ventures, and Canaan Partners offered the viewpoints. The panelists agreed that the industry was maturing to a “Phase II” stage with several companies reaching capitalization over $100 million Wende Hutton from Canaan advised attendees to “check all the boxes” when submitting information to a venture capital firm. She stressed the importance of checking figures and milestones carefully for accuracy, and making sure critical issues like reimbursement are covered in detail.

Wasserstein advised attendees to consider the “capital efficiency” of a venture, referring to the ratio of return to investment. If a startup’s total capital needs can be cut from $60 million to $40 million, for example, without cutting into long-term profitability, this would make the venture more attractive from a capital efficiency standpoint.

Presentations
James Cavuoto, Neurotech Reports
Terri Zmina, NDI Medical Inc.
Everett Shockley, Chubb Group
Anne-Marie Ripley, Alfred Mann Foundation
Gail Schechter, BioIntelligence
Andrew Merickel, Knobbe, Martens, Olson, & Bear
Chris Berka, Advanced Brain Monitoring, Inc.
Burke Barrett, Cyberkinetics, Inc.
Jeff Gagnon, Enpath Medical
Vince Owens, Texcel LLC
Kevin Wasserstein, Versant Ventures