A Decade of Progress and Challenges

As we begin our tenth year of publishing Neurotech Business Report, we can’t help but look back on the previous decade as a time of amazing progress yet some frustrating challenges for the neurotechnology industry. As the decade—and the twenty-first century—began, there was one major competitor, Medtronic Inc., and a number of smaller upstarts competing in just a handful of application areas. Today, Medtronic has considerable competition from both large and small firms, and the number of approved indications has blossomed dramatically.

Clearly, advances in technology such as DBS, new electrode materials, neurosensing, and signal processing have helped grow the industry. So too has investment from private equity firms, government agencies, and large corporations seeking new partners.

But some of the same challenges that confronted the industry in 2001 remain with us today. Reimbursement headaches remain a detriment to both startup firms and major players alike. New companies are still reeling from the weak financial markets that are remniscient of the economy in 2001. And clinical trials continue to bedevil neurotech companies and their research partners.

Coming on the heels of Northstar Neuroscience’s failed stroke rehabilitation trial, which led to the demise of that company, the news that EnteroMedics failed to meet its primary endpoint in its obesity stimulation trial is particularly disheartening. There continues to be concern expressed that new neurotech companies are not devoting enough attention to the design of clinical trials and the selection of trial participants.

As if these most recent failures were not enough to worry about, the FDA is now taking steps to set tougher scientific standards for medical device clinical trials. The New York Times reported that the acting director of the FDA’s Center for Devices and Radiological Health will urge device makers to use more sharply defined endpoints in clinical trials. The agency may also urge producers to monitor enrollees more closely to determine whether the targets are met.

But all is not doom and gloom. At the recent meeting of the North American Neuromodulation Society in Las Vegas this month, Ann Costello of CDRH offered some encouraging words for manufacturers of neuromodulation systems. Citing the example of the agency’s approval of DBS for treatment of obsessive-compulsive disorder, she noted that the neuromodulation therapy compared favorably to surgical interventions like capsulotomy in terms of risk. And since DBS is adjustable and reversible, the path to approval was smoother.

All things considered, we expect the neurotechnology industry to be stronger and wiser in the years ahead as a result of the experiences—both positive and negative—of the last decade.

James Cavuoto
Editor and Publisher



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