2023 in Review

by James Cavuoto, editor

As we bid farewell to another year, it’s worth taking a look at some of the more significant events that took place in the neurotechnology industry in 2023. While the industry has not yet returned to the levels of investment and valuations of 2021, there is certainly more optimism among startups in this space compared to a year ago.

Among the neurotech startups and emerging firms who fared well this year are Synchron, with a $75 million C round, Cognito Therapeutics, which raised $73 million, Precision Neuroscience, which raised a $41 million B round, and Paradromics, which raised $33 million. And despite a rash of negative publicity, Elon Musk’s Neuralink firm raised $280 million from investors, based in large part on getting approval to conduct human trials.

The spinal cord stimulation market segment saw the introduction of two new competitors this year, Saluda Medical and Biotronik Neuro. Although this brings the number of major players in this space to six, each firm has its own unique capabilities and the outlook for the SCS segment still appears robust, despite another round of attacks in the form of negative publications and news reports. An apparent change of heart by regulators in Washington State, which will no longer block its residents from getting SCS systems, was a positive sign.

Reimbursement issues continue to be a challenge confronting vendors of both implantable and noninvasive neuromodulation systems. As more details emerge about CMS’ proposed TCET program, there is a degree of optimism that the FDA’s breakthrough device designation will have financial benefits, even though the original MCIT program no longer exists. The revival of at least some funding mechanism for breakthrough products could be a lifesaver for firms like Cala Health, which is currently facing a threat of non-coverage from CMS.

These issues notwithstanding, several new neurotech firms were granted breakthrough device designation this year, including Precision Neuroscience, INBRAIN Neuroelectronics, Paradromics, Reach Neuro, Aneuvo, and Cognixion.

On the technology front, advances in identifying potential brain biomarkers for both chronic pain and major depression offered neuromodulation vendors the hope of closing the loop on their therapeutic approaches. And a host of new firms and research institutions made progress developing more flexible implants that mesh well with the neural tissue that they either stimulate or record from.

Finally, several strategic firms brought on new executives in 2023 to lead their neuromodulation franchises. These include Medtronic, Nevro, and LivaNova. And while 2023 was not rich with IPO activity in this space, the potential for significant M&A activity in 2024 continues to loom large.

All in all, 2023 was a transition year for the neurotechnology industry, with a mix of positive and negative developments but with a decided edge for the former. We expect even better days ahead in 2024.