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Emerging Medtech Companies Fill Neurotech Pipeline

BUSINESS NEWS

When compared with long-established fields of medical technology such as imaging, orthopedics, or cardiology, the field of neurotechnology is barely a toddler. Nevertheless, according to experts, this nascent area of research holds vast promise for creating a wave of new diagnostics, devices, and drugs with the power to identify and treat diseases and conditions that have often proven resistant to traditional approaches.

Worldwide, more than 500 companies are actively developing neurotechnology treatment modalities, according to The Neurotechnology Industry 2008 Report, published by NeuroInsights (San Francisco), a neurotechnology research and advisory firm. Researchers are working toward treatments for a wide range of brain disorders and nervous system illnesses, including Alzheimer's disease, addiction, anxiety, attention deficit disorder, depression, epilepsy, hearing loss, insomnia, migraine, obesity, pain, Parkinson's disease, schizophrenia, sleep disorders, stroke, traumatic brain and spinal cord injury, and many others.

According to the Neuro-Insights report, revenues for the neurotechnology sector rose 8.3% during 2007 to a total of $130.5 billion. The neuropharmaceutical segment is the largest in the sector with revenues of $109 billion, followed by neurodiagnostics at $16 billion, and neurodevices at $5.5 billion.

Within the neurodevice segment, the largest share of the market belongs to neuromodulation devices, which deliver electrical stimulation to designated targets in the brain or central nervous system.

The potential for growth in this arena has not gone unnoticed by the nation's largest medtech companies, many of which have established a significant presence in neuromodulation research through organic growth, acquisitions, or investment partnerships with smaller firms. Medtronic Inc. (Minneapolis) is far and away the global leader in the sector with annual revenues from its neuromodulation business at around $1.3 billion, or 10% of all sales. Boston Scientific's neuromodulation unit generates annual revenues of around $220 million, while St. Jude Medical Inc. (St. Paul, MN) is close behind at $210 million.

But much of the focus in the neurotechnology sector is on new and emerging companies that are preparing to introduce a bevy of products designed to ameliorate patient pain and suffering across a broad spectrum of brain and central nervous system disorders (see Table I). Emerging technologies in the sector offer the promise of profound treatment breakthroughs and associated financial rewards. But, as ever, they are also subject to the perils of clinical trials gone awry and frequently struggle for funding in an often skittish investment climate for advanced technologies.

As populations around the globe continue to age, the incidence of neurological and psychiatric diseases and disorders—and the demand for treatment—will increase substantially in the future. According to Casey Crawford Lynch, managing director of NeuroInsights, "Brain-related illnesses afflict more than 2 billion people worldwide and 100 million in North America—creating an annual economic burden of $1 trillion in the United States and twice that amount worldwide."

Driven by those fundamentals, says Crawford Lynch, it's no surprise that the neurotechnology industry made substantial gains in 2007, which have continued into 2008. "Commercial neuroscience represents one of the fastest-growing and critically needed sectors of the healthcare industry. Interest and investment in the sector have increased more than 250% since 1999—reaching $1.77 billion in 2007."

The neurotech sector would receive a significant boost if Congress were to approve legislation to establish a proposed National Neurotechnology Initiative (NNTI), which would provide $200 million annually—less than 4% of the total federal neuroscience research budget--over five years to accelerate the investigation and development of treatments and cures for brain-related illnesses.

The bill that would establish NNTI was introduced in May by Senators Pete Domenici (R–NM) and Patty Murray (D–WA), and Representatives Patrick J. Kennedy (D–RI) and Ileana Ros-Lehtinen (R–FL). "With nearly one in three Americans suffering from some kind of neurological illness, disorder, or injury, I believe it is time we take a serious look at how we approach and fund research into neuroscience and neurotechnology," Domenici said.

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