NeuroMetrix Occupies Peripheral Position in Neurodiagnostics Market

by James Cavuoto, editor

While several companies competing in the neurodiagnostics market have chosen to concentrate on the central nervous system, manufacturing devices such as electroencephalography or magentoencephalography systems, Waltham, MA-based NeuroMetrix Inc. has set its sights on the peripheral nervous system. The company, founded in 1996 by Shai N. Gozani as a spin-off from the Harvard-M.I.T. Division of Health Sciences and Technology, manufactures a new class of non-invasive products for point-of-care testing of neuromuscular disorders.

Background
NeuroMetrix founder Shai Gozani invented most of the core technology in use at the firm. He holds degrees in computer science, biomedical engineering, and neurobiology from the University of California, Berkeley, and a medical degree from Harvard Medical School. He has been an instructor of both neurophysiology and electrical engineering at Harvard and nearby Massachusetts Institute of Technology.
The venture capital firm Harris & Harris Group was the original seed investor in NeuroMetrix in 1996. Other investors included Whitney & Co., BancBoston Ventures, Delphi Ventures, Commonwealth Capital Ventures, and MIT. The firm closed a second round of financing of $14 million in 1999 and a third round of $13 million in 2001.

Market
Among the peripheral nerve disorders that NeuroMetrix is targeting are repetitive stress injuries, diabetic and toxic neuropathy, and low-back pain. Perhaps the most common form of repetitive stress injury is median nerve entrapment (often referred to as Carpal Tunnel Syndrome). It occurs because of excessive pressure on the median nerve as it runs through the carpal tunnel. The median nerve may become pinched or entrapped between the swelling of the flexor tendons and carpal bones of the wrist.

Ulnar neuropathy can be caused either by entrapment or by systemic factors. The most common entrapment is called cubital tunnel syndrome, which occurs at the elbow. Entrapment of the ulnar nerve at the wrist, known as Guyon’s canal syndrome, is less commonly seen. Ulnar neuropathy can also occur as the result of a systemic neuropathy, such as diabetes or drug toxicity. Systemic neuropathy can result from diabetes, drug toxicities, and toxic exposures.

The company’s current product line includes a nerve-conduction monitoring system called NC-stat, biosensors used with the median and ulnar nerves, and a management information system that connects a clinician’s office with a report-generation system engine located at NeuroMetrix offices. NC-stat includes a battery-operated monitor, preconfigured disposable biosensors, and a docking station that receives patient data from the monitor and transmits it to the company’s onCall information management service.

The monitor measures DML and F-wave latency by stimulating the median or ulnar nerve with short electrical impulses. The system then detects and processes the bioelectric activity associated with the particular muscle response. Using a process known as volume conduction, NC-stat eliminates the need to locate specific recording sites on a muscle. Clinical trials have demonstrated that NC-stat yields DML and F-wave latency values virtually identical to those obtained with traditional electrode positioning. NC-stat received FDA approval for sensory nerve evaluation in 2001 and for lower extremity nerves in 2002.

The median and ulnar biosensors incorporate electronic circuitry, stimulating and sensing electrodes, a proprietary electrochemical gel, and a temperature sensor that automatically adjusts for temperature variations at the measurement site. Each single-use biosensor is preprogrammed with a unique serial number to link patients to their test results. NeuroMetrix maintains that its biosensors eliminate the most time-consuming and error-prone steps in nerve conduction studies: placement of electrodes on the patient and connection of electrodes to the diagnostic instrument.

In the long run, perhaps the most lucrative product in the NeuroMetrix line is its onCall Information Management System. Neurotech Reports projects the market for neurodiagnostic reports to grow from $26 million this year to $110 million in 2005. Physicians access onCall via the Internet or fax. The onCall website provides physicians “patient specific” information that corresponds directly to the information contained in the onCall report.

Physicians may search the onCall database for recent visits, collect all nerve conduction study results on a specific patient ID, or query for the most elevated or abnormal results. The web site also provides “population based” information that summarizes the practice’s patient population. Reports can be generated that summarize nerve conduction study results, by organization group, age, height, and other patient parameters.