From November 2001 Issue
Leaders Meet to Discuss Challenges Facing New Industry
by David E. Griffith, senior editor
The leaders of an emerging industry face many challenges. Chief among these is exactly what to call their industry, what to include or exclude from their industrys big tent, how to segment their industrys market, and how to elevate their industrys profile with the media and the investment community.
All of these issues and more were debated and discussed at last months Neurotech Leaders Forum held at the Sheraton Gateway Hotel in San Francisco. Organized by Neurotech Business Report and underwritten by Mayfield Fund, the Forum attracted more than a dozen industry leaders representing diagnostic, neural interface, and neurostimulation companies, and featured a spirited exchange of ideas and opinions.
Moderator James Cavuoto, editor and publisher of Neurotech Business Report, opened the session with an overview of the industry and analysis of its past, present, and future. One of the days most pivotal discussions was over the very meaning of the word neurotech as it applies to the industry. Cavuoto defined neurotech as: The application of electronics and engineering to the nervous system, a definition that was generally approved by the audience.
Alan Gevins, Ph.D., president of SAM Technology, argued that there were benefits to including neurotech under the umbrella of biotech. We are too small a segment to stand alone, he said.
Wende Hutton, a partner at Mayfield Fund, explained the venture capitalists position on the difference between biotech and neurotech. I think its very tough for investors and my colleagues to get their arms around it when someone says theyre a biotech company and theyre not making some sort of compound.
Huttons comments led to an informal poll of the participants, with an overwhelming majority saying that their companies were not biotech companies but medical device manufacturers.
Ann Bunnenberg, Ph.D., president of Electrical Geodesics Inc., cautioned that the characterization of neurotech as a class of medical devices is problematic and warrants a definition that differentiates neurotech devices from other medical devices. A definition is helpful so that investors will put us in a place thats different than the place for dental drills, she said, adding that, Neurotech is a nice term because it recognizes that we look at the nervous system.
The forum participants concluded that neurotech was an accurate and descriptive name for their industry. They next considered the question of what product categories should be included under the neurotechnology umbrella.
Neurotech Reports recent market study of the neurotechnology industry describes five product categories: neural prostheses, neuromodulation, therapeutic stimulation, neurodiagnostics, and neural-computer interfaces.
The key discussion during the market segments presentation centered on Cavuotos decision to include neural stimulation devices that restore lost bodily functions, including Medtronic stimulators used to control incontinence under the category of neural prostheses. Medtronic classifies its incontinence device as a neurostimulation product.
Mayfields Hutton suggested that from the point of view of the venture capital and investor community neurotech companies should accept Medtronics taxonomic lead. Medtronic refers to its implantable spinal and brain stimulators as neurostimulation devices. Medtronic is the industry leader, and they have [already] categorized their products, she explained. If you can follow the big kahuna leading the parade and theyve categorized things a certain way, I dont think a small group of fledgling companies should try to buck them.
At the end of the days session, the market segments were addressed in a free-flowing group discussion. The general consensus was that five segments was too many, and the participants agreed that neurotech should be organized as neurostimulation (including neural prostheses, neuromodulation, and therapeutic stimulation), neurodiagnostics, and neural-computer interfaces.
Following the discussion on product categories, the forum participants addressed ways to make the neurotech industry more visible to the media and the investment community. One suggestion was the formation of a neurotech trade association. SAM Technologys Gevins took a negative view on that. There just arent enough zeroes yet. Its balkanization Theres just not enough money in it. Gevins comments met with general approval. One major dissenting voice was Electrical Geodesics Bunnenberg who argued that an association is essential to growing an industry.
In addition, to the discussion of the challenges and issues facing the industry, forum participants were given an opportunity to present information about their prospective businesses and fields of study.
Jerome Stone, R.N., program manager for the San Francisco-based California Pacific Medical Center Research Institute, gave a presentation on the clinicians point of view regarding clinical trials and pain studies.
Benjamin Knapp, Ph.D., cofounder of BioControl Systems Inc. in South San Francisco, explained his companys research into neural-computer interfaces for monitoring the causes of repetitive stress syndrome injury.
Edgar Eiland, vice president of Atlanta-based Neural Signals Inc., discussed his companys work on neural-computer interfaces to help stroke and ALS patients communicate.
Anath Natarajan, M.D., CEO of Baltimore-based Infinite Biomedical Technologies, talked about his companys work on clinician-driven neural monitoring systems.
Ann Bunnenberg, Ph.D., president of Eugene, OR-based Electrical Geodesics Inc., detailed the technology behind her companys geodesic dome-shaped EEG monitoring system.
Yitzhak Zilberman, director of Business Development for the Alfred Mann Foundation, explained the mission and operations of the Santa Clarita, CA-based research organization.
At the conclusion of the Forum, the participants overwhelmingly agreed that the day-long meeting was beneficial for the industry. They also were very receptive to a discussion of holding additional forums and conferences.