Neurotech Leaders Forum Brings Together Investors and Entrepreneurs

Nearly 60 neurotechnology executives and financial professionals met in San Francisco on October 3 to discuss a number of management and funding issues confronting the industry at the Second Annual Neurotech Leaders Forum. The event was sponsored by Neurotech Reports, with platinum sponsorship from Quallion, LLC.

In a well received keynote address, Warren Grill of Case Western Reserve University in Cleveland, OH discussed a number of the most promising technologies coming down the road in the neuro space and the challenges that must be met to fulfill that promise. Grill began with an update on current successes in neurotechnology and then moved into a discussion of the newest developments on the forefront of the field. These include hybrid neural interfaces, the role of stimulation in synapse formation and plasticity, and neural regeneration

Grill also spoke of some of the challenges confronting the industry, which included long and costly product development and product approval cycles, intellectual property inertia, regulation, and reimbursement.

A panel of venture capital professionals encouraged entrepreneurs to seek funding despite the relative newness of the industry and the conservative nature of many VC firms. Panelists included Roger Quy from Technology Partners, Andrew Firlik from Canaan Partners, Daniel O’Connell from NeuroVentures Capital, and Heath Lukatch from Piper Jaffray Ventures.

Lukatch, whose background is primarily in biotech funding, spoke of some of the differences in funding compound versus device companies in the neuro space. Quy mentioned some challenges confronting the neurotech device industry, which include less invasive neurostimulation techniques, better bio-electrical brain interfaces, and targeted drug/device combination therapies. Firlik offered Caanan’s outlook on the climate for funding neurotechnology. The firm believes that neuromodulation represents the single greatest market growth opportunity in the medical device sector. He advised participants to build awareness and expertise in neuromodulation and suggested that VC firms might play a role in forming neurotech startups by helping assemble management and research teams.

A spirited discussion among panelists and audience followed the VC panelists’ introductory statements. One point that attracted attention is the notion that many VC firms are conservative, and lacking a clear example of a big winner in the neurotech device space, it’s harder to attract startup funds. Joe Schulman of the Alfred Mann Foundation pressed the panelists to consider their batting average of financial return on initial investment for medical device firms vs. other industries. The panelists generally agreed that the risk is much lower in the medical device world.

Several neurotechnology startup CEOs made presentations during an afternoon entrepreneur session. These included Peter Baillie of Epic Biosonics in Victoria, B.C., a manufacturer of a totally implantable cochlear prosthesis, Stanford Miller of Neuronetics in Duluth, GA, a manufacturer of a transcranial magnetic stimulation device, Shmulik Shany of NESS, Ltd. in Israel, which manufacturers arm- and leg-mounted functional electrical stimulation systems, and Al Kyle of Walnut Technologies in Andover, MA, which has developed a stroke intervention device. Presenters were seeking between $5 and $10 million in series A or B funding.

A management issues panel featured Robert Greenberg from Second Sight Ltd., in Valencia, CA, Ann Bunnenberg from Electrical Geodesics, Inc., in Portland, OR, and Arthur Prochazka from Neurokinetics, Inc. in Edmonton, AB. Issues discussed at this session included technical and financial barriers confronting startups, and reimbursement.

Among the large medical device and healthcare firms at the forum were Johnson & Johnson, Viasys Healthcare, Boston Scientific, and Guidant. Smaller firms present at the event included Neurometrix, NeuroControl, NeuroPace, and Neurostream. Other venture capital firms participating in the forum were Onset Ventures, McKinsey, Versant Ventures, and Vento, LLV.


 

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