Investors and Entrepreneurs Meet for First Bioelectronic Medicine Forum in NYC
by Jennifer French, senior editor
March 2018 Issue
Investors, entrepreneurs, and funding agencies gathered in New York City earlier this month for the inaugural Bioelectronic Medicine Forum hosted by Neurotech Reports. The event highlighted a new and growing segment of the neurotechnology industry which is projected to grow to more than $7 billion by 2022, according to The Market for Neurotechnology: 2018-2022. Attendees discussed funding opportunities, regulatory and reimbursement issues, new economic and pricing models, and other issues confronting the industry.
Kicking off the event were three pioneers who helped shape the field. Kristoffer Famm of Galvani Bioelectronics reflected on the birth of the segment with a gathering in 2013 to build a roadmap which was later published in the journal Nature, “Drug discovery: a jump-start for electroceuticals.” At that time, they had 14 potential diseases on which to focus the animal models that were also ripe for potential translation. Famm walked through some lessons learned over the last five years such as the challenge of building technology using rodent models and the need to move to large animal models quickly. He also pointed out the key features of first-generation products with organ specificity, minimally invasive implantables, user friendly external controls, and cloud interfaces. Famm described Galvani as “an ambitious pipeline company” with over 65 partnerships today.
Gene Civillico from the NIH SPARC program discussed the investments the NIH has made in this space and the growing need to focus on specific fascicles within a nerve. The true advantage of a device over a pharmaceutical or biologic is its acute ability to engage a target specifically, he said. The SPARC program is seeking to move into the next generation of public/private partnerships. It is also focused on tool development such as MAP-CORE, an integrated simulation platform of organs and peripheral nerve map of the human body.
Eric Van Gieson from DARPA described the ElectRx program. Although his agency’s focus is on servicing the military and service members, they are also interested in translation and building industrial partners. An RFI is forthcoming to engage the venture community with DARPA programs. The ElectRx program was created to address inflammatory response in the human body as well as infection, pain, and post-traumatic stress while building an understanding of the associated physiology and the tools to address them. Examples of current projects include understanding the impedance of the gut, treatment of PTSD with VNS, and use of optogenetics for pain. DARPA has also cooperated with GE Ventures for using ultrasound to modulate glucose levels.
Andrew ElBardissi of Deerfield Management, Imran Eba of Action Potential Venture Capital, and David Turkaly of JMP Securities participated in a panel discussion devoted to investment. For companies developing new technological platforms, their advice is to gain a good understanding of the physiology and to pursue well established targets or therapies with an unmet need. On the topic of how to prime government-funded research programs for the investment community, the panelists advised bringing up commercialization early in the device development stage. “Academics tend to focus on scientific proof and validations rather than crafting it into a commercial device,” said ElBardissi. Eba concurred, offering as examples entrepreneurs in residence and grooming researchers for business.
Another panel featured the perspectives of biopharma firms looking at bioelectronic medicine. In the past, neuromodulation tended to be the therapy of last resort for many conditions. With the emergence of bioelectronic medicine, we should seek to have devices prescribed with or even before a drug option for treating patients. Kadir Kadhiresan of Johnson & Johnson Development Corp. provided some valuable insights. He mentioned that in devices, “We are not big on mechanisms of action,” which tends to be an issue for investors from the pharmaceutical space. Also, adoption from the clinical community is critical for market success. Kadhiresan advised to be “clear on the health economic benefit” as this tends to be more important to the clinician than system pricing.
Moderating the session on regulatory and reimbursement issues was Jeremy Koff from Neurotech Reports. He kicked off the session with lessons learned from SetPoint Medical. On the regulatory side, they engaged the FDA early and frequently. Asking specific questions rather than open-ended inquiries helped them with IDE approval. SetPoint is seeking reimbursement from a dosing perspective, similar to that of pharmaceuticals.
Peter Staats of electroCore also shared lessons learned when they brought their noninvasive VNS device to market. They approached reimbursement from the strategy of those of glucose monitoring systems. The device is offered for free or a low price while the payments are sourced from the subscriber or usage fee. “We created a digital drug,” stated Staats.
The implications of this model could become an issue for the end-user and ongoing treatments. During this discussion, Edward Black of Reimbursement Strategies provided advice on the “dark art” of reimbursement. The three independent but fundamental components of reimbursement are coding, payment, and coverage. Stimulating devices have specific codes for DRG, spinal, tibial, and soon vagus nerve stimulation. He advised that if ventures can stay within these areas, reimbursement can be a swifter process
The challenge in the U.S. market is that individuals change health plans every 2.3 years, which drives insurers to take a short-sighted view for treatments. With that in mind, Black advised that creating a health economic profile of your device is important even if payers express that it is not their interest. Chad Gibson of CMD Medtech rounded out the panel discussion with some tips from a regulatory perspective. For novel technologies, he recommends the de novo classification or PMA pathway with the U.S. FDA.