Industry Veterans Offer Guidance at 2019 Neurotech Entrepreneurs Workshop
by James Cavuoto, editor
December 2019 issue
The first ever Neurotech Entrepreneurs Workshop, produced by IEEE Brain, Arizona State University, the University of Houston, and the University of Pittsburgh, was held at the ASU campus on December 13-15, 2019. At the workshop, 20 neurotechnology industry professionals joined 30 future entrepreneurs chosen from a pool of graduate trainees selected to participate by the organizing committee.
The 30 participants were assigned to one of 10 teams, each tasked with developing an elevator pitch to commercialize a fictitious neurotech product randomly assigned to them. The three-member teams spent Saturday afternoon meeting with mentors who offered advice relating to value proposition, stakeholder analysis, ethical considerations, business model, and pitch development. On Sunday afternoon, the 10 teams made their pitches to a panel of judges who acted as potential investors and scored each team’s presentation.
The fictitious products assigned to the 10 teams included a robotic exoskeleton, a BCI for upper-limb amputees, an orthotic device for treating foot drop disorders, an upper-body adaptive resistance trainer, a gaming system using eye tracking for rehabilitation, an artificial skin, a robotic surgical device for treating brachial plexus, a BCI to help treat phantom limb pain, an intracranial device for treating epilepsy, and a neurostimulation therapy for treating psychiatric disorders.
During the workshop, several participants from the neurotech industry gave presentations offering their insights on what it takes to commercialize new neurotechnology products. Kyle Siegal from Skysong Innovations stressed that neurotech entrepreneurs need an overall strategy to identify and prioritize intellectual property. He recommended that entrepreneurs not limit their discussion of IP to just patents when presenting to potential investors, but to look at potential trade secrets, trademarks, and software copyrights.
Robert Greenberg from the Alfred Mann Foundation, which licensed IP to Axonics, said that the fact that the Medtronic patent is specific about its use of tines may weaken their case. Greenberg also used Axonics as an example of the range of licensing deals possible between a research institution and a startup firm. Axonics’ license with AMF specifies chronic pain, inflammation, as well as bowel and bladder disorders, and they have an option to expand into digestive disorders, plus their license is sublicensable. AMF retains a noncommercial license in the technology for research and educational purposes, plus the right to license back any improvements that Axonics makes. A typical royalty agreement might call for a 4 percent royalty on device sales, with a $200,000 per year minimum, Greenberg said. AMF offers partners a “smorgasbord” of options, he said, including the ability to rent space and other services from the private institution.
Andy Cornwell from the Cleveland FES Center and the Case Coulter Translational Research Partnership advised entrepreneurs to hire their own lawyer, rather than rely on the university’s lawyer, when negotiating agreements. During negotiation, entrepreneurs should pay close attention to the scope of the license, any obligations such as milestones put on the licensee, as well as the overall compensation to the university.
Several successful neurotech entrepreneurs gave presentations during the workshop, and offered advice to the 30 trainees based on their experience. These included Dan Rizzuto from Nia Therapeutics, Greg Gage from Backyard Brains, Amy Kruse from Platypus Neuro, Matt Angle from Paradromics, Jamie Tyler, the founder of Thync and several other startups, and Jose Carmena from iota Biosciences.
Rizzuto related that he didn’t start negotiating with Penn until he left his faculty position at the university. He expects to have a full license in hand shortly. He advised entrepreneurs with a limited budget to look for ways to bootstrap their firm from one funding round to the next.
Carmena, who took a leave of absence from UC Berkeley, said you have to leave academia to get past the “valley of death” that often confronts translational research prior to commercialization. He described the difficulty in getting from seed round to round A. “It seemed we couldn’t get past the second or third meeting with VCs,” he said. iota has now secured a $15 million round to get them to an IDE from the FDA.
Tyler spoke rather frankly about his time at Thync, which sought to commercialize a consumer tDCS headset and succeeded in raising early VC funding. “My biggest regret is I didn’t listen to myself,” he said, looking back at the concerns he had with the way his CEO was spending money. Thync spent $15 million in marketing in 12 months, Tyler said, including $60,000 for a party at someone’s house. Tyler said he managed to keep some IP from Thync, including some pulsed ultrasound technology he is seeking to commercialize for other purposes.
Kruse encouraged participants looking at the consumer neurotech space to consider challenges that have confronted previous players, including sensor comfort, battery life, and data stream integration. “It’s now okay to talk about enhancement,” she said.
Eric Van Gieson from DARPA gave attendees and overview of DARPA’s mission and its many programs funding neurotech research and development. “If you’re working on a DARPA program, you’re going to hear from us,” he said. “We’re not going to hold you to milestones—it’s more like ‘inchstones’,” he said. The best way to engage with DARPA is to talk to a program manager early on in their time at the agency, preferably in the first three months, he said. He also advised entrepreneurs to consider participating as a subcontractor.
Sponsors of the 2019 workshop included Blackrock Microsystems, Facebook Reality Labs, and the Cleveland FES Center.