Following Our Heart

Since the inception of the neurostimulation device industry, many market observers, analysts, and investors have compared the emerging market for implanted neuro devices to the growth of cardiac devices 20 years ago. One of the most recent people to make that comparison is Alan Levy, CEO of Northstar Neuroscience and keynote speaker at the 2005 Neurotech Leaders Forum [see article p7].

Levy is in a position to know. Prior to founding Northstar, he was CEO of Heartstream, a manufacturer of automatic external defibrillators that was eventually sold to Hewlett-Packard. Before that, he was president of Heart Technology, a manufacturer of coronary devices that was sold to Boston Scientific. Many of Northstar’s venture capital investors are no doubt betting that Levy can turn that trick again, and judging from his description at the Forum of Northstar’s technology for cortical stimulation, that seems like a safe bet at the moment.

Any doubt that investors may have had about the long-term viability of the neurotechnology market should have been put to rest with St. Jude’s purchase of ANS this month [see article, p1]. Coming on the heels of Boston Scientific’s purchase of Advanced Bionics last year, the stage is now set for a showdown in neuromodulation devices among three medical device giants, Medtronic, Boston Scientific, and St. Jude, who just happen to be competitors in the cardiac device market. This recent M&A activity still leaves J&J/Guidant on the sidelines in neurostim devices, but not for long in our estimation.

The comparison of neurotech to cardiac devices is certainly a flattering one. Our forthcoming research report The Market for Neurotechnology: 2006-2010 projects the worldwide neurotech device market will exceed $3 billion next year; the cardiac market will likely be 10 times that. Still, we can’t help thinking that the comparison may be limiting in the long run, given the much larger number of clinical applications, medical specialties, and patient populations that can be served with neuro devices.

With all the attention given to the big three’s competition in neuromodulation devices, there are several other very promising categories of neurotech devices that have yet to gain the same level of investor and analyst interest. Neurorehabilitation devices, such as muscle stimulators, neurorobotic systems, and neural regeneration stimulators, are poised for dramatic growth, according to our report. And new types of neural prostheses, including motor prostheses and new FES devices, have already attracted the attention of device makers such as Otto Bock, Hanger, and Ossur.

We would not be too surprised if this publication were to feature a front page article about Victhom, Cyberkinetics, Bioness, Andara, or some other neurotech startup being acquired by a medical device giant.

James Cavuoto
Editor and Publisher