By HOLLAND JOHNSON
BB&T Associate Managing Editor
And DON LONG
BB&T

CHICAGO — The last half of the 20th century saw the most impressive med-tech developments in cardiovascular therapies — heart transplantation, pacemakers and implantable cardioverter defibrillators, bypass surgery and angioplasty, plus stents, heart assist devices and even artificial hearts. Those developments, of course, will continue to be refined. But the clinical landscape is changing, often because of the success of new therapies for heart disease, thus keeping people alive longer.

This new landscape is marked by a great many more people over age 65, but often living with an increasing number of debilitating conditions that reduce the quality of life, both for themselves and for their families.

And this landscape is likely to drive the development of therapies for this condition, and likely to mark the first half of the 21st century as the "age of neurotechnology." This clearly must have been in the thinking of the Cleveland Clinic (Cleveland, Ohio) in its developing this year's annual Innovation Summit which focused on the field of neuroscience and its emerging opportunities.

Delos Cosgrove, MD, president/CEO of the clinic, introduced last month's summit by emphasizing the rapid rate of innovation currently in neuroscience. Multiple breakthroughs, he said, have "opened up new vistas of the brain and nervous system. The neuroscientists are making inroads in treating difficult disorders."

And he referred to broad scientific opinion suggesting that "neurosciences on the threshold are having an impact on society as powerful as Darwinian evolution."

The clinic is attempting to catch this wave with its establishment last year of the Neurological Institute on its campus, with the goal of integrating the departments of neurology, neurosurgery, neuroimaging and psychiatry and psychology together with the other healthcare sciences.

Cosgrove said that the institute's inventors and researchers are developing products in areas ranging from cognitive restoration to deep brain stimulation under the supervision of Cleveland Clinic Foundation Innovations, the technology commercialization arm of the clinic.

Attempting to lead

Elaborating on the challenges of putting together the Neurological Institute, was Michael Modic, MD, interim chairman of the institute and chairman of the clinic's Department of Radiology. Modic said that the institute's goal is to develop groundbreaking work in neurotechnology that will be copied and so provide paths that others will follow.

The institute is breaking the "business as usual" approach in med-tech development, Modic said, by organizing its efforts around the disease rather than the departmental discipline. "In so doing … we've aligned the clinical, the research, the education and the finances so that you could truly have a multi-disciplinary approach which involved the different specialties along a disease line in a contained fashion," Modic said.

Other goals of the institute are to create "strategic themes that become the focus along the disease line" and to help patients access the multi-disciplinary paradigm. "If you can't get in, you can't experience quality," he said.

Financially, not so easy

While the clinic is highly optimistic about the prospects for its efforts, its selection of speakers and panelists were uniformly upfront in acknowledging that the companies working neuroscience face more than the average range of difficulties on the funding side.

Moderating a panel on that topic, Harry Rein, general partner of Foundation Medical Partners (FMP; Rowayton, Connecticut), asked panelists what they perceived as the possible pitfalls of early investment in this sector. "Do you run the risk of being one of those early Christians that gets eaten, or is it the right time to be in the [neuroscience] space?"

Roger Quy, PhD, a general partner at VC firm Technology Partners (Palo Alto, California), said the neuroscience space does present unique challenges; in particular, "The trials are often difficult and that's coupled with the fact that there's also a very high placebo effect."

Ryan Drant, a general partner at New Enterprise Associates (Baltimore), said that a VC assumes that risk comes with the territory. "That's why we have a portfolio approach," he said.

One of the keys to success, Drant said, is to hire talented managers and support them to help mitigate the risks, though he noted that "there will certainly be some risks that will be difficult to overcome." And Drant emphasized that the chances for success decrease if the target markets aren't of the larger sort. "There's nothing worse than an A team in a C market," he said.

Gary Curtis, president/CEO of Concentric Medical (Mountain View, California), a company developing the Merci Retriever, a device used to remove blood clots from the brains of ischemic stroke patients, said there is not a lot of experience from the VC side in neuroscience investment. Hence, his company had to educate investors for the first couple of rounds and then educate another group of investors in order to get added downstream funding.

Frank Fischer, president of NeuroPace (Mountain View, California), a company developing technology to detect, treat and monitor epilepsy and other neurological disorders via responsive brain stimulation, contrasted his experience in running a neuroscience company with his prior experience at the helm of Heartport (Redwood City, California), a company that was developing less invasive heart surgery techniques.

"From an FDA perspective, devices in the neurology space are much rarer than in the cardiac space," said Fischer. "So you run into a situation where people are much experienced at the agency relative to development of device trials and so on."

Fischer also noted that clinical trials in the neurology space are much more difficult than in cardiology. "The reason," he said, "is that most [clinical] sites are not familiar with neurological devices, so we basically have to retrain them to become familiar with the technology."

Large opportunity in implantable space

Cardiovascular science has tended to lead the way in the development of new medical technologies, and that appears to be holding true in the emerging neuroscience field. Hence, the development of pacemakers and ICDs appears to be providing a clear pathway for neuroscience in the area of implantable neuromodulation devices.

Neuromodulation devices, which most often provide therapy via deep brain stimulation (DBS), are already providing successful — albeit still early-stage — treatment for chronic pain, spasticity and movement disorders such as Parkinson's disease. And there are many more emerging applications for the therapy, including Alzheimer's disease, spinal and head injuries (the latter highlighted by the ongoing war), intractable angina, epilepsy, depression and obsessive compulsive disorder, stroke and a host of other conditions.

Ali Rezai, MD, moderated a summit panel focusing on both the current and future applications of neuromodulation therapy that also featured a "who's who" of companies, big and small, that are actively pursuing neuromodulation programs.

Rezai, director of the clinic's Center for Neurological Restoration and director of its Brain Neuromodulation Center, said the neuromodulation market for medical devices is just the "tip of the iceberg." Thus, he described the current state of the technology in the field as still very early stage, and "in my opinion [comparable] to where 25 to 30 years ago in cardiac devices — and needs to really develop further." Rezai said that ultimately he sees medical devices utilized much earlier in the disease process for neurological conditions, perhaps in many cases even supplanting drugs. "The concept of brain pacemakers is here to stay," Rezai said.

'Invisible' to 'mainstream'

While neuromodulation is still in its adolescence, Chris Chavez, CEO of St. Jude Medical's (St. Paul, Minnesota) Advanced Neuromodulation Services (Plano, Texas) business, said it has already come a long way since its beginnings. "It's literally gone from being an invisible therapy to something that is on the verge of becoming mainstream," he said. "The neuromodulation business already accounts for more than $1.5 billion worldwide, Chavez said, adding, "it promises to be a multi-modality, multibillion dollar business in the not to distant future."

One of the beauties of neuromodulation, he said, is that because it is targeted, one can reduce the dosage of stimulation, thereby reducing side effects. And he said that these devices will become smaller, be driven with longer-lasting batteries, have an increased level of efficiency and be available at greatly reduced cost. "I genuinely believe that it is even impossible to imagine what this field will look like in 10 years."

Richard Kuntz, MD, president of the neurological business of Medtronic (Minneapolis), said his company views the ultimate neuromodulation payoff "to be the targeted, regulated delivery of electrical stimulation or chemical compounds that really is not achievable by systemic administration. I think that this goes beyond neuromodulation itself."

Alan Levy, PhD, CEO of Northstar Neuroscience (Seattle) — the beneficiary of a $100 million IPO earlier this year — described how Northstar is using electrical stimulation to stimulate the cortex (outer layer of the brain) to treat a variety of conditions. Since its products are placed outside the brain and not used in deep brain stimulation procedures, Levy noted that this makes them "fast, safe and easy to place." Additionally, since the cortex controls so many neurological functions, "it makes us able to treat many neurological conditions."

A focus on stroke

One area that the company is focusing on is chronic stroke. Each year 500,000 people in the U.S. survive a stroke and are told they have to live with the debilitating effects of it.

By stimulating neurons in new neuroplastic areas of the brain Northstar is working in clinical trials to show that plasticity and brain function can be "significantly" enhanced.

Northstar's system also is in a clinical trial to test the efficacy of cortical stimulation treatment-resistant depression.

Discussing a technology for possibly repairing spinal cord injury with neuromodulation technology was Timothy Surgenor, president/CEO of Cyberkinetics Neurotechnology Systems (Foxborough, Massachusetts). Surgenor described a technology that utilizes an oscillating field stimulator (OFS) to entice nerve fibers to grow towards each other for spinal injuries.

A clinical study of acute spinal cord has shown promise, he said, and the FDA has designated the system as a candidate for a Humanitarian Device Exemption (HDE). "We're planning to file for that [HDE] approval next quarter," Surgenor said.

The power of just thinking

Cyberkinetics is also exploring a completely different technology called the Braingate system which uses a Neuroport sensor to allow stroke patients who cannot speak or walk to remotely control devices, such as computers and wheelchairs, by using only their thoughts to direct the systems.

The company is also planning to use the Neuroport sensor as a therapeutic and diagnostic tool to study and predict epileptic seizures using specific circuits in the brain as opposed to the traditional method of studying generalized regions of the brain.

Surgenor envisioned for the attendees eventually combining the Braingate and OFS technologies to create a closed loop system that would function much like a heating system that is regulated via a thermostat.

"One example of how these can be combined would be closed loop devices that allow you to use the OFS technology to repair brain injuries or strokes and actually be able to measure their progress using the Braingate sensing technology."

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