Small Change

The financial news from the neurotechnology industry in recent months has been dominated by big-money transactions. Multi-billion- dollar mergers like the St. Jude Medical/ANS deal and the Boston Scientific/Advanced Bionics purchase have helped garner attention to our relatively new and growing industry.

But despite all this lucrative activity, the field is still populated by more small and upstart companies whose nine- and 10-digit paydays are still down the road a bit. The Cyberkinetics purchase of Andara Life Science earlier this month [see article p3] is an example of the type of low-budget M&A activity that may escape the attention of the financial press and big-game hunters.

But surely, the significance of transactions such as this far surpasses the $4.6 million in paper that the deal is worth today. Considering that neither Cyberkinetics nor Andara existed four years ago, other than as interesting research projects at Brown and Purdue universities, the deal is quite remarkable. It will prove to be even more remarkable once the combined entity begins delivering on its promise to restore mobility and independence to paralyzed individuals.

Similarly, the launch of NDI Medical’s new Micropulse business unit [see News Briefs p4] represents more than just another new player in the implantable pulse generator market. This privately held firm eschewed normal venture-capital investment routes, electing to make do with resources supplied by the state of Ohio and Case Western Reserve University. But the company’s strategic location and partnerships may well make it a much sought-after target once the big players in neurostimulation devices see the unique benefits of the company’s technology. Another example of this bootstrap philosophy spinning off from university research is Electrical Geodesics [see profile, p6].

Victhom Human Bionics is yet another small neurotech firm with great long-term value, in our opinion. The Canadian developer of neural prostheses, which added to its patent portfolio this year, has its stock trading for under $1 (U.S.) on the Toronto exchange. But its bionic closed loop system—and its pending deals with major medical device manufacturers—makes it another diamond in the rough if this industry develops the way we expect it to.

Small ventures such as these demonstrate the intrinsic value of university research laboratories pursuing work in neurotechnology, and should provide encouragement to the technology transfer offices that are charged with helping to commercialize them. In time, the large players who are used to shelling out orders of magnitude more cash for their acquisitions will see the value represented by this multitude of neurotechnology upstarts.

James Cavuoto
Editor and Publisher