Injecting Reality

by James Cavuoto, editor

The news that Stimwave founder Laura Perryman was indicted by the Department of Justice [see article, p3] makes us sad for a number of reasons. First, whether or not the government’s allegations are borne out, it casts a negative spell on the neuromodulation industry—and the PNS market segment in particular—at a time when the industry is already reeling from journal articles casting doubt on neuromodulation’s efficacy and from negative coverage decisions from some private insurers.

Second, the medical device industry has so few examples of women as CEOs—the loss of even one potential role model could have a chilling effect. Some have tried to draw a parallel between Perryman and Elizabeth Holmes, the convicted founder of Theranos, but that does not seem apt. The technology behind Theranos was shown to be fraudulent, but that is not the case with Stimwave. The allegations of fraud here have more to do with billing and finance than with the therapeutic validity of the product.

As was the case with former Autonomic Technologies CEO Niamh Pellegrini, whose firm was also brought down by allegations of fraud that had no bearing on the product’s viability [NBR Jan20 p5], Perryman’s technology will likely live on under a new name and with a new, male CEO.

Some supporters of Perryman have raised the specter of gender discrimination but we don’t believe that was the issue here, though it certainly may be at other medtech companies and in other industries. From the start, Perryman was a lightning rod in the neuromodulation industry, often poking at executives of strategic neuromodulation firms, claiming their products—and their commercialization efforts— were overpriced. It would not surprise us to learn that executives of other SCS and PNS firms are gleeful about Perryman’s current troubles, though we were unable to confirm her suspicions that one or more competitors was in cahoots with Kennedy Lewis to take her down.

The third reason for our sadness is that regardless of one’s opinion of Perryman, this is one more example of an entrepreneur losing control of the company they founded. This is always a risk for entrepreneurs when they’re forced to give up majority control in order to attract investment. But medtech entrepreneurs would be well advised to give serious consideration up front to their willingness to work alongside an outside CEO if and when it becomes necessary.

Still, it was Perryman’s choice to bring in the new investors in 2019 that she now claims are at the root of her problems. If Kennedy Lewis and their partners are truly as evil as she makes them out to be, then perhaps a little more due diligence on her part would have been advisable in 2019. The same can be said about the Stimwave investors at that time; if Perryman truly is as dishonest as they now claim, perhaps a little more due diligence on their part in 2019 might have been advisable.

No one here is recommending people contribute to Laura Perryman’s legal defense fund. Most of her current problems are of her own making. But neurotech professionals who once looked up to her as a role model can still appreciate the engineering innovation she brought to the industry without condoning some of the more negative aspects of her tenure.

One way or another, the Freedom stimulator that Perryman injected into the neuromodulation industry will live on even if her freedom is impacted.