Neurodevices Poised for Significant Growth 4696

According to a report released earlier this month, the number of patients in the United States with diseases that are potentially treatable with neurodevices is currently 78 million, or about 28% of the total population. “It's a fragmented market,” says Alexander Arrow, MD, an analyst for Lazard Capital Markets (New York City) and principal author of the report, titled Medical Technology for Neurosurgery, Neurology, and Psychiatry. “But it's one that is beginning to shape the neuro-physician groups that use these devices—much the same way that early use of arterial balloon catheters in the 1980s created the interventional cardiology market that now dominates the cardiovascular space.”

Through the end of this decade, Arrow believes, growth of the entire neurodevice marketplace will outpace the growth of medtech in general. The global neurodevice market is currently valued at around $2.3 billion, increasing to $4.6 billion in 2010, for a compound annual growth rate of nearly 19%.

About 75% of the current market is in the United States, 15% in Europe, 6% in Asia, and 4% in rest-of-world markets. Arrow says that hospitals and healthcare systems outside the United States “tend to be resistant to buying $18,000 implantable neurostimulators and $3.5 million tumor-destroying devices.”

The Lazard report explores a number of hypothetical scenarios regarding technologies, products, and companies in the neurotechnology sector—and which are most likely to gain physician acceptance and market success.

The sector is largely driven by neurodevices that have demonstrated clinical efficacy in treating Parkinson's disease, movement disorders, epilepsy, brain aneurysms, hydrocephalus, head trauma, and ischemic strokes, as well as devices employed in tumor-removing neurosurgery. However, Arrow sees significant future growth potential in neurodevices developed to treat depression, migraine headache, obesity, and Alzheimer's disease. Within the next four to seven years, Arrow says, neurodevices designed to treat chronic anxiety, obesity, bulimia, and obsessive-compulsive disorder should also become available.

Analyst estimates of the current size and scope of the neurodevice market vary, but most reports agree on at least one point: the sector's potential for growth is significant. According to The Neurotechnology Industry 2006, a report by NeuroInsights (San Francisco), neurological diseases and psychiatric illnesses represent the largest and fastest-growing unmet medical market, with conditions affecting 1.5 billion people worldwide.

The NeuroInsights report breaks the $110 billion neurotechnology industry into three sectors: neuropharmaceuticals, neurodevices, and neurodiagnostics. While the neurodevice sector's estimated annual revenue of $3.4 billion represents the smallest of the three slices, its 21% annual growth rate far exceeds those of neuropharmaceuticals and neurodiagnostics, at 7% and 11% respectively.

Another recent report, The Market for Neurotechnology: 2006–2010 by Neurotech Reports (San Francisco), estimates that the market for neurotechnology products will reach $3.07 billion in 2006 and grow to $7.62 billion by 2010.

According to James Cavuoto, editor and publisher of Neurotech Reports, “The market for neurotechnology products is poised to become one of the most dramatic growth areas of the 21st century.” The research firm defines neurotechnology as “the application of electronics and engineering to the human nervous system.” The firm breaks neurotechnology into two major segments: neurostimulation and neurosensing.

Seizing the potential of the neurotechnology sector is high on the list of targets for a number of medtech's established players, including Boston Scientific, Johnson & Johnson, Medtronic, and St. Jude Medical. In the cover story of the September/October issue of MX, Richard E. Kuntz, president of Medtronic Neurological, shares his thoughts on the emerging potential of this field. “Neuromodulation has the potential to offer a lot of solutions that have yet to be discovered, and there are opportunities for companies both big and small to develop such solutions,” says Kuntz.

“We plan to grow our division aggressively over the next five to 10 years,” he adds. “Neuromodulation is going to be an application that will help a lot of patients.”

Kuntz is expected to be one of the featured speakers at the Cleveland Clinic Medical Innovation Summit in November. This year's summit will focus on new technologies, economics, and trends in the field of neurosciences.

The Lazard report covers 10 specific neurotherapeutic device categories: implantable neurostimulators (which currently account for more than half the market), transcranial magnetic stimulators, implantable drug pumps for pain control, brain membrane repair patches, brain artery aneurysm fillers, hydrocephalus shunts, head-holding devices, devices for treating strokes, brain tumor destroying devices, and psychokinetic devices (see table).

Among the medtech companies that are active in this emerging sector, none participate in all 10 neurodevice niches, and no company has products in more than five. The report identifies 18 manufacturers that compete in this emerging sector.

In this regard, Arrow says, neurotechnology stands in stark contrast to other medical technology sectors such as interventional cardiology and orthopedic surgery. In those sectors, a handful of players are active in every category and essentially control the market. By contrast, the current fragmentation of the neurotechnology sector is a “potential harbinger of eventual consolidation,” says Arrow.

© 2006 Canon Communications LLC

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