NeuroVentures Capital Specializes in Funding Neuroscience Firms

by James Cavuoto, editor

NeuroVentures Capital cannot boast having as large a fund or as well known a name as some of the Sand Hill Rd. firms on the west coast. But the Virginia-based firm can claim to be the largest, and perhaps the only VC firm to target the neuro space exclusively.

NeuroVentures management includes two professionals with a well meshed combination of skills and experience. Managing director Mark Cochran worked in the pharmaceutical industry for many years, including stints as vice-president of business development for Bayer Pharmaceuticals and at MicroGeneSys Inc., a biotech firm he founded. Cochran earned his Ph.D. from Queen’s University in Canada and has done post-doctoral work at the National Institutes of Health. He was previously in charge of the San Francisco office for MDS Capital Corp., a Toronto-based VC firm with $600 million under management.

Director Daniel O’Connell has worked with several medical and healthcare startups, including MedSpecialists, Inc., a clinical ASP for medical specialists, and Surgical Solutions, LLC, a company dedicated to commercializing neurosurgical products developed at university research laboratories.

The firm’s medical and scientific advisory board is a virtual who’s who in neuroscience, including Floyd Bloom, chairman of the department of neuropharmacology at The Scripps Research Institute in La Jolla, CA and CEO of Neurome Inc., Zach Hall, the former director of NIH’s National Institute of Neurological Disease and Stroke, William Mobley, chair of the department of neurology and neurological sciences at Stanford University, and Donald Price, professor of pathology, neurology, and neuroscience at Johns Hopkins University School of Medicine.

As of this point, NeuroVentures has invested in seven companies in the neuro space. These investments include both device manufacturers and drug discovery firms in the neuro space. In the latter category are EnVivo Pharmaceuticals, Inc., a San Francisco firm developing small-molecule compounds for treating neurodegenerative diseases, Kadmus Pharmaceuticals, Inc., a Menlo Park, CA firm developing compounds to treat chronic pain, and David Pharmaceuticals, Inc., a Half Moon Bay, CA firm working on compounds to treat memory loss.

Device companies in NeuroVentures’ portfolio include Concentric Medical, Inc., a Mountain View, CA firm developing products for stroke intervention, and SpineWave, Inc., a manufacturer of products for the spinal market.

NeuroVentures has targeted the neuro space because they see an enormous opportunity in treating neurological and psychiatric diseases and disorders, particularly as the graying of the population continues to exert influence on the prevalence of these disorders. The firm also believes that research initiatives such as the Decade of the Brain and the Human Genome Project have brought to the forefront new tools and opportunities for neuroscience firms.

Looking specifically at neurotech devices, O’Connell believes there are many advantages available to neurostimulation and neurodiagnostic firms, despite the prevalence of orally delivered small market therapeutics. One factor in devices’ favor is that CNS drugs often pose delivery challenges, side effects, and limitations in universal effectiveness. He also notes that devices often offer a faster and cheaper path to market than pharmaceuticals, and can bring a large degree of technological innovation to the table. The market segments with the greatest opportunity for neurotech devices are stroke, pain, epilepsy, Parkinson’s disease, and depression, according to O’Connell. He believes that neurotech startups such as Vertis Neuroscience, NeuroMetrix, Inc., and NeuroPace offer examples of emerging companies to watch.